Boeing CEO to testify before Senate panel over safety concerns

Boeing (BA) CEO Dave Calhoun is set to testify before a Senate panel Tuesday at 2 p.m. ET. The CEO will face questions about the safety and manufacturing of the company's aircraft.

Yahoo Finance's Seana Smith and Brad Smith report more on the story and how investors are digesting the news.

Read more about what to expect from today's hearing here.

Read more about the Justice Department's investigation of Boeing here.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

Video Transcript

Well, everyone.

Boeing is in the spotlight again.

CEO Dave Calhoun gets set to testify before a Senate panel at 2 p.m. Eastern time today, where he'll face questions surrounding the safety and manufacturing of Boeing's aircraft.

Now Calhoun will be stepping down from the helm of the company before the end of the year, and this is going to be taking place in front of the Senate Committee on Investigations.

The investigation subcomittee, we should note, and Senator Richard Blumenthal is the head of that.

And so ultimately here, there are a few things that could be key to watch coming out of this hearing, especially as it relates to Boeing investors that are out there.

Of course, the thing that jumps out to me is what comes out from the investigations that are moving forward, that you hear from not just the executives at the company, but more of the employees who are now coming forward about what they're noticing in some of the negligence or noticing in some of the operational procedures that would lead to missteps in manufacturing.

And then additionally, if this rattles any of the potential buyers of large planes, some of the orders that Boeing relies on for years, they are able to kind of deliver upon some of those targets we don't have, I think, the next big air show until July, so that coming forward over the summer, that is going to be the key one that is also noteworthy to watch going into that event about a month out from now, that is going to interesting just seeing exactly what the demand looks like and also their ability to meet the demand when you come when you talk about some of those setbacks.

Some of the things that stuck out to me was late yesterday, the subcomittee here releasing a staff memo, including, among much other information.

This is all, according to reporting from The Wall Street Journal, allegations from a Quality Assurance inspector and Boeing 737 factory in Renton, Washington.

So again, you talk about the fact that Boeing and specifically Dave Calhoun, the CEO, they are under tremendous amount of pressure trying to defend the culture of Boeing, trying to defend the inspection process and and exactly the different um, the different, I guess, processes that are in place right now, policies that are in place uh, so he of course, is going to be forced to try and defend that now, in the written statement that has been reported by many other outlets as Boeing CEO Dave Calhoun, saying that much has been said about Boeing's culture.

We've heard those concerns loud and clear, but our culture is far from perfect.

But we are taking action and making progress, and I think what exactly that action is, what kind of progress they have seen.

That is really going to be the crux of a lot of questions here from lawmakers throughout the day.

And, of course, it's going to be questions that many analysts and many shareholders want to be answered as well.

Especially when we talk about the uncertainty going ahead and the leadership question, too.

Exactly.

Who is going to be filling the shoes of Dave, Dave Calhoun and next year.

And don't be surprised either if we hear them being very pointed with their questions and even almost kind of walking the fence of accusatory, given the severity of what's taken place.

But a lot of these senators are still going to want to paint Boeing as hey, a great American company a company that's done a tonne in aviation and defence.

Why?

Because it's really the only large aviation play of this magnitude for some of the commercial aviation that we have in in this country, quite frankly, here.

And you think about and Breyer and their, uh, being headquartered in in Brazil And then, of course, the other large plane, uh, manufacturer, which is Airbus and them being headquartered in Netherlands.

These senators are still going to want to show the public that there's confidence in flight while also that they are being, uh that they they are having a a kind of stance of accountability for Boeing, especially as this proceeding moves forward.

Uh, it sounds like some of the senators, at least Blumenthal is going to be painting this as, uh uh, a day, or at least a hearing of reckoning for Boeing here