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How Boeing’s leadership was ‘fired’ by its own customers

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A revolt by U.S. airline bosses helped topple Boeing’s top leadership including CEO Dave Calhoun this week, capping weeks of pressure after the freakish Jan. 5 blowout of a door plug on an Alaska Airlines 737 MAX 9 passenger jet, people familiar with the discussions said.

Dave Calhoun speaks during a press conference.(Reuters)
Dave Calhoun speaks during a press conference.(Reuters)

With the company’s major U.S. customers agitating for a boardroom meeting without Calhoun, Boeing’s board pre-empted their demands with a major upheaval.

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Now, after the shakeup that took out the CEO, chairman and head of Boeing’s commercial airplanes business, airlines face prolonged uncertainty over jet supplies and are calling for deeper changes – starting with picking a manufacturing heavyweight as CEO.

“It wouldn’t surprise me that people said, ‘What exactly is the Boeing strategy to change this, not put a Band-Aid on it,’” former Air Canada CEO Calin Rovinescu told Reuters.

“There’s a point at which you cannot pretend that everything is fine. And I think this has been the call to action that you probably heard from the airline community.”

Boeing said it had nothing to add to comments from Calhoun, who told employees on Monday that he had been considering stepping down as CEO for some time. He added that the company would “fix what isn’t working, and we are going to get our company back on the track towards recovery and stability.”

The Jan. 5 incident plunged Boeing into a new crisis five years after the second of two fatal crashes grounded the MAX.

Regulators began curbing Boeing’s already lagging production. Airlines strained to adapt their schedules to the ongoing delays that meant fewer planes available for delivery.

Boeing struggled to convince customers it would be able to overcome the heavy scrutiny, particularly following safety board reports that focused on weaknesses in the production chain.

The catalyzing moment was last week, when CEOs of major U.S. MAX customers Southwest, United, Alaska and American demanded to meet the board to express frustration at a lack of progress, sources said. Boeing Chairman Larry Kellner offered to set up bilateral meetings instead.

But over the weekend, Boeing’s board pre-empted that action – agreeing to staggered departures of Calhoun, Kellner and planemaking CEO Stan Deal, whose post went to chief operating officer Stephanie Pope. A senior industry source described the shakeup as Boeing management being “fired by its customers.”

Insiders noted it was the broadest top-level clear-out since CEO Phil Condit resigned days after the company’s finance director was fired in a defense-contract scandal in 2003.

“The U.S. carriers were determined to force regime change,” said a source familiar with the discussions.

‘OFF THE STAGE’

Some said Calhoun, who claimed the move was his decision, jumped before he was pushed, agreeing to leave by year-end.

But pressure from the industry and regulators had been growing for weeks, and boiled over when more loose bolts were found in late January.

United CEO Scott Kirby announced it would no longer wait for the delayed MAX 10, Boeing’s best hope of countering Airbus’ hot-selling A321neo in the busiest part of the market.

“The Max 9 grounding is probably the straw that broke the camel’s back for us,” Kirby told CNBC.

Kirby promptly flew to France to start talks with Airbus , with Boeing’s rival hoping to win a 200-plane deal.

Alaska Airlines CEO Ben Minicucci, who is said to have played a particularly active role in pressuring Boeing, told NBC: “It makes me angry. Boeing is better than this.”

Such conversations more typically take place in private.

Industry unity had cracked after the MAX groundings that followed crashes in 2018 and 2019 led to lawsuits over delays.

But the intensity of this month’s intervention astonished boardroom observers and demonstrated the fragile confidence in Boeing’s once-sure grip on safety and reliability issues.

“The dynamic between supplier and customer in the case of Boeing has gone beyond extremes anyone has seen,” said independent aviation adviser Dick Forsberg, who helped found one of the largest aircraft leasing firms, Dublin-based Avolon.

Another person familiar with the talks said major U.S. airlines – apart from Delta, which publicly stayed out of the fray – had resolved to get Boeing leaders “off the stage.”

The plan gathered speed at an Airlines for America meeting this month, sources told Reuters, confirming a report on the coordinated airline action by The Air Current.

During the meeting, the CEOs met privately with U.S. National Transportation Safety Board chair Jennifer Homendy. After she departed, the CEOs including Kirby said it was time to seek a meeting with the Boeing board, the sources said.

CARRIER COUP

While airline bosses went public, the powerful leasing firms who own half the world fleet waded in more discreetly.

At an annual Dublin summit in January, lessors publicly backed Calhoun but delegates were critical in private and predicted it would be weeks before Calhoun was ousted.

A notable exception was budget airline Ryanair CEO Michael O’Leary, who defended Calhoun while taking aim at the Boeing division in Seattle where the 737 is built.

Crisis experts acknowledge that under Calhoun, Boeing abandoned the unpopular, legalistic tone it adopted after earlier MAX crashes, publicly admitting to mistakes. That said, he repeatedly insisted that the current management would usher through the “profound changes” demanded by U.S. regulators.

As the dust settles, experts say the carrier coup will be studied for years.

“The commercial aviation base rebelled. I can’t think of when that’s ever happened,” said Jeffrey Sonnenfeld, Lester Crown Professor in management practice at Yale School of Management.

“It’s career-ending if all of your customers said they don’t have confidence in you, and wanted to go to your superiors,” he said, adding such collective action was rare in any industry.

Boeing is not alone in facing post-pandemic disruption. Airbus is delaying deliveries due to missing parts and insiders say the volume of quality reports is above target. Engine firm Pratt & Whitney has had a slew of publicized problems.

But airlines say the slump in morale and high turnover in Boeing factories since the pandemic have cast a pall over the production and planning process that will take years to fix.

Airlines insist planes are safe after the earlier MAX crashes led to cockpit changes and a worldwide increase in oversight.

But with some passengers now researching plane models before buying tickets, airlines say more needs to be done to reassure the public.

“What is needed here is indeed someone who has a strong engineering background, who has the patience, the interest, and the disposition to get into the details of what goes on on the manufacturing floor,” Rovinescu said of the next Boeing CEO.



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Nikhil Kamath alerts investors on ‘hand-picked stocks’ WhatsApp scam: ‘Use common sense’

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Zerodha co-founder Nikhil Kamath informed investors that he has never had any WhatsApp group where he shares “hand-picked” stocks as advertised by a group. The group claims to assist people in picking the right stocks and Nikhil Kamath said that “this is obviously not from me” as he urged people to use a little “common sense”.

Zerodha co-founder Nikhil Kamath alerted investors about a scam on Whatsapp.
Zerodha co-founder Nikhil Kamath alerted investors about a scam on Whatsapp.

“Scam alert, this is obviously not from me, I have never had or have any WhatsApp groups, nor do I give tips etc. Please report these… Also to all the brands who reach out, I don’t do paid promotions/collaborations/ads/paid speaking engagements of any kind. Please stop spamming, and everyone use a little common sense please,” he said along with an image of the fake advertisement.

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What did the scam advertisement claim?

The scam advertisement showed that the WhatsApp group had details of stocks handpicked by Nikhil Kamath that would rise in April. The ad asked investors to join the WhatsApp group which would share their picks of reliable stocks every day as it said, “First 1,000 members get it for free.”

See Nikhil Kamath’s post here:

Earlier Nikhil Kamath advised fellow entrepreneurs in India to not open franchises of global brands in India but try to take Indian brands to the world.

He said, “To all my entrepreneur buddies, the future may be to take Indian brands global, not franchise global brands in India. The Indian narrative is getting cool globally, we have mystique, royalty, history, artisan, handmade, exotic, and so much more to sell.”

He added, “What was yesterday a garment manufactured in India called John, Peter and Louis something and marketed by western models, could be tom Subko, Hatti Kaapi, 11.11 etc sold in New York with the faces of Indian artisans who spent hours on each product individually.”



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RBI ban on Bank of Baroda World app: Finance ministry’s likely plan on frauds

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Union finance ministry may propose stricter measures to protect citizens from cyber fraud, it was reported. This comes after an increase in incidents of frauds, including the Bank of Baroda World app scam, the Times of India reported citing sources who “mentioned a recent inter-ministerial meeting focused on bolstering cybersecurity and tackling financial fraud”, it noted.

A security official walks past an emblem of the Reserve Bank of India at the RBI headquarters, in Mumbai.
A security official walks past an emblem of the Reserve Bank of India at the RBI headquarters, in Mumbai.

What was RBI’s action on Bank of Baroda World app?

In October 2023, the Reserve Bank of India (RBI) stopped Bank of Baroda from onboarding new customers on its mobile app ‘BoB World’ citing material supervisory concerns. The bank said in response that it had already carried out corrective measures to address the concerns.

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“The Reserve Bank of India has, in exercise of its power, under Section 35A of the Banking Regulation Act, 1949, directed Bank of Baroda to suspend, with immediate effect, any further onboarding of their customers onto the ‘bob World’ mobile application,” RBI said in a statement.

“Any further onboarding of customers of the bank on the ‘bob World’ application will be subject to rectification of the deficiencies observed and strengthening of the related processes by the bank to the satisfaction of RBI,” it added.

What report said on steps Finance Ministry could take?

The report claimed that Finance ministry could be in support of stricter Know Your Customer (KYC) procedures and due diligence by banks and financial institutions while onboarding new merchants. This applies to Business Correspondents (BCs) as they may be more vulnerable to security breaches, as per the report.

Additionally, the ministry’s proposal also stresses on the need for improved data security and data protection practices at the merchant and Business Correspondents level. The report claimed that the RBI may ask banks to review concentration of Business Correspondents in areas with a high incidence of cyber fraud.



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Sakuma Exports shares to trade ex-rights today: Check price, allotment, ratio here

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Sakuma Exports rights issue 2024: The rights issue of Sakuma Exports Ltd will open on April 25 and will close on May 13. The rights issue record date is April 15 and the company will offer 78,984,298 equity shares at a price 25.3 per share. The issue size is 199.83 crores while the entitlement ratio is 33:98 which means 33 rights share for every 98 fully-paid equity shares held on the record date.

Sakuma Exports rights issue 2024: The rights issue record date is April 15 and the company will offer 78,984,298 equity shares at a price <span class=
Sakuma Exports rights issue 2024: The rights issue record date is April 15 and the company will offer 78,984,298 equity shares at a price 25.3 per share.

Sakuma Exports: What is rights issue?

In the rights issue, a company grants existing shareholders the right to buy new shares at a discount to the current trading price. The issue gives existing shareholders securities called rights while companies give shareholders a chance to increase their exposure to the stock at a discount price.

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Sakuma Exports: What to expect?

The Board of Directors of the company declared rights issue of equity shares for the eligible shareholders and said in a stock exchange filing that “the issue of 7,89,84,298 equity shares of face value of Re. 1 each (Equity Shares) to Eligible Equity Shareholders aggregating up to Rs. 19983.03 lakhs in accordance with applicable laws, including the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (SEBI ICDR Regulations).”

“The Board of Directors, in accordance with Regulations 30 and Regulation 42 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, as amended and Regulation 68 of the SEBI ICDR Regulations, at its meeting held today ie., April 8, 2024, has considered and approved April 15, 2024 as the record date for the purpose of determining the Eligible Equity Shareholders who are eligible to apply for the Rights Equity Shares, in the Issue (Record Date),” it added.



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