The tongue ever turns to the aching tooth, and so I am always in a search for any fresh negative information about Boeing Corporation (BA). As you well know, I have conceived a long-term bullish position in Boeing's major rival Airbus (AIR) since the beginning of 2024, later complemented by a more risky idea of short-selling directly on Boeing stock. I waited for the moment when the trading deal with Boeing proved to be effective, following the official US FAA (Federal Aviation Administration) announcement on investigating another whistleblower's claims that the aircraft manufacturer allegedly ignored reported safety or quality warnings when continuing a mass production of its 787 and 777 jets. As a result, the share price of Boeing lost nearly 2% this Wednesday to set another anti-record since at $174.63 on daily closing price since late November of 2022. The lowest intraday point was below $172.50. Now I am riding my hobby horse again by sharing the details of Boeing's potentially growing reputational concerns, which strongly affected supply orders.

A January 5 panel blowout on a 737 MAX plane served as a faint warning compared to Boeing engineer Sam Salehpour's testimony before the FAA commission. The man already witnessed challenges like threats and exclusion from working meetings, after he "identified engineering problems that affected the structural integrity of the jets", adding that Boeing "employed shortcuts to reduce bottlenecks" during 787 assembly, according to his attorney's comments to Reuters. Previously, the FAA had to investigate quality problems and manufacturing flaws for the same 787 model, which led Boeing to halting deliveries of this jet for more than a year in 2021-2022. At that time, Boeing management admitted some 787 planes had shims of improper size for filling tiny gaps with areas violating skin-flatness specifications. Yet, the engineer Sam Salehpour insists that further assembly process made an "excessive stress on major airplane joints. As two examples, "embedded drilling debris" was allegedly found by him on more than 1,000 planes, while some misalignment problems in the 777 jets were remedied by using force, so that he "literally saw people jumping on the pieces of the airplane to get them to align".

"Voluntary reporting without fear of reprisal is a critical component in aviation safety," the FAA only commented after the meeting with the whistleblower. Sometimes conciseness may tell more than verbosity. As to the professional community of engineering employees, called SPEEA, it just identified him as a member who works at Boeing's plant in Washington. In combination with a strange “suicide” of another Boeing's accuser, John Barnett, the story continues to cast a shadow on the giant company's working processes on assembly of popular jets. A Senate investigation subcommittee is scheduled to hold a hearing with Salehpour in about a week, on April 17. The issue is titled "Examining Boeing's Broken Safety Culture: Firsthand Accounts''. Boeing CEO Dave Calhoun recently said he is going to step down by the end of 2024, and he would supposedly testify at a hearing. The top Republican members on the panel said their goal is "to provide Boeing the opportunity to explain to the American people why, in light of recent apparent safety failures, the public should feel confident in Boeing's engineering and assembly processes''. "Rather than heeding his warnings, Boeing prioritized getting the planes to market as quickly as possible, despite the known, well-substantiated issues he raised," Salehpour's lawyers said in their statement a couple of days ago.

On a parallel course, the U.S. Department of Justice said it is trying to find out whether Boeing violated a 2021 settlement that allowed the company to avoid responsibility on a charge of "conspiring to defraud the FAA" after two fatal crashes in 2018 and 2019. Nothing looks easy for Boeing now. Its delivery numbers plunged nearly by half YoY, as of the end of March. As the investigations are protracted, the market crowd is not eager to dig up Boeing shares from the hole it entered mostly by its CEOs' inaction and silence. Technically, the accomplished failure under the thin ice of a former $180 support would lead to a test of an area around $150 per share, which I feel as still a good chance for earning money on holding short sell positions on Boeing. The next possible target could be around $125, corresponding to the very lows of 2022.

Meanwhile, Airbus shares moderately retreated from its recent all-time peaks, yet its management confirmed confidence in airplane output forecasts. The European competitor of Boeing is getting additional orders from all those airlines, which need to continue post-covid recovery. Nothing new or very special except that Airbus reported 142 deliveries in Q1, being closer to the way to an annual delivery target of 800 aircrafts. Single-aisle production volume is below planning levels at around 50 planes a month, but the manufacturing process is going to be accelerated to reach 75 a month in 2026, the company's chief executive Guillaume Faury confirmed.