Not a fun number to tally... In addition to scrutiny and lost trust, the safety issues that contributed to two downed planes full of passengers have cost Boeing a lot of money already:
- For customer reimbursements: The airlines that bought 737 Max planes were planning to fly them. Since they haven't since March, Boeing said last week it put aside $5.6B to reimburse them.
- For lost sales: Since March 13th, not a single 737 Max has been delivered. Instead of turning into $2.7B of revenue for Boeing, the planes are filling up company parking lots (literally).
- For the victims: The Ethiopian Airlines crash killed 157 people. The Lion Air crash killed 189 more. Boeing is paying their families through a $100M fund.
- Grand total: $8.4B
How does that giant number compare?... We took a stroll down the hall of corporate shame to find out.
- Volkswagen paid $30B for cheating regulators and customers about "clean" diesel cars.
- Facebook was just fined $5B for letting Cambridge Analytica manipulate 87M users' votes in the 2016 election.
- Wells Fargo was punished $575M for opening fake accounts for millions of unknowing customers.
- Bank of America, JP Morgan, and Citi (among other huge banks) paid $16.5B, $13B, and $7B for setting up the perfect kindling — subprime mortgage loans — for a 2008 financial system fiasco.
Boeing's future looks fine... Stock prices reflect future profits, and Wall Street clearly thinks Boeing can dust this one off. The reason is competition (the lack of it) — Comparing Boeing's stock drop to Volkswagen's makes it clear.
- 🚗 Volkswagen's shares fell 60% in the months after Diesel-gate. That's because there are dozens of car companies that customers could switch to.
- ✈️ Boeing's stock is down only 11% since the 2nd plane crash in March. That's because there's only 1 planemaker customers could switch to – Airbus — and its orders are booked out for almost 8 years.
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