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Business

The United States and Boeing have long had a special relationship




Dorothy Robyn was senior financial advisor to President Bill Clinton. He was responsible for promoting the US aviation industry.

Part of the job did not choose pages between companies. But that was one exception: Boeing.

"That was the only company I could advocate for," Robyn said. In competitions between US companies, administration remained generally neutral. But Boeing's commercial aircraft department employed tens of thousands of Americans, and the main competition, Airbus, was in Europe.

"In the engine business, you can't choose between GE and Pratt & Whitney. With Boeing, that's it. They are ours. It's the only sector where we have a de facto national champion and you can be a challenging lawyer for it. "

For Boeing's 102-year history, dating to the beginning of World War I, and the country's pride, along with creating hundreds of thousands of jobs, the United States equipped with top military aircraft and delivering aircraft worldwide. Boeing and US regulators are facing criticism for slow reaction to the crash of a Boeing 737 Max 8 jet in Ethiopia. Boeing's mixed interests with the US government come

There is a lot to investigate.

For decades, US presidents have supported the company's interests and over the last 30 years they have done so while mainly flying on the two Boeing VCs. 25A which acts as Air Force One when the president is on them.

President Bar Ah Obama hired members of the Boeing Board to serve as his Chief of Staff and Trade Secretary. Against Republican opposition, he firmly defended the Federal Export-Import Bank, which has subsidized so many airline sales to foreign airlines by offering loan guarantees that conservative critics have emptied it as "Boeings Bank."

"I have to say that, given the number of planes I've sold all over the world, I expect a guardsman on my pension," Obama said at a Boeing plant in 2012.

President Trump seemed to get to a uneven start with company, criticizes Boeing's Air Force One contract before entering the office. But Boeing's CEO Dennis Muilenburg, while praising Trump's "business headset", pledged to keep costs down and win favor with the president. Trump later made the unusual step that Muilenburg could sit on a phone call to an air force manager who managed the Pentagon's largest weapons program. In December, Trump dropped a former Boeing practitioner, Patrick M. Shanahan, as acting defense secretary after leaving Jim Mattis.


President Barack Obama speaks at a Boeing plant in Everett, Wash., In 2012. (Ted S. Warren / AP)

And Trump's policies, including pushing for a big increase in US exports and increasing military spending , has been favorable to Boeing, who has seen the stock price almost triple since he took a stand, before coming down during this last week's crisis.

Boeing was among the top companies that spent money last year and tried to influence US decision making. The Chicago-based aviation giant spent $ 15.1 million on lobbying the federal government and employing about 100 lobbyists on behalf of it.

In addition, Boeing's political action committee made $ 2.4 million in donations to political candidates in 2017 to 2018, the eighth most in the country among companies, according to the Center for Responsive Politics. The recipients included 329 current members of the congress.

The last few years have been particularly good for the company's bottom line. Boeing booked a record [$ $ 101.1 billion in 2018 revenue, an increase of 13 percent from the previous year, and analysts say about a quarter of it was from public contracts. In 2017, Boeing received an estimated $ 23.3 billion in taxpayer's funded contract prices, not including classified military funding. And joint ventures with Lockheed Martin and Bell Helicopter Textron received $ 2.2 billion and $ 2.5 billion in federal contract financing respectively in 2017.

The company's share reached a full-time $ 446 per share this month before falling after crash of Ethiopian Airlines Flight 302 a week ago. The closed Friday only under $ 379 per share.

Daniel Auble, senior researcher at the Center for Responsive Politics, called Boeing "an excellent illustration" of "the unwarranted influence of money in our political system."

In response to questions about the company's lobbying and campaign spending, Boeing issued a statement defending its practice.

"As the nation's largest exporter and a leading manufacturer of both commercial and defense-related aviation products, there are a number of key political issues at federal, state, and local levels with the potential to influence our business, our diverse workforce and our supply chain. is focused on telling Boeing's history and supporting policies that promote the aviation industry and US production in the communities where we live and work. "

Boeing's growth has obviously benefited the United States. Boeing is still one of the country's top producers, which estimates 153,027 people in the United States at a time when Trump has made domestic production a top political and political priority. Boeing serves as one of the country's largest exporter of goods.

"When the government seeks to increase exports, you will usually find that Boeing is heavily involved in what initiative they are performing," said Andrew Hunter, a defense industry expert with a strategic and international study center. "It was true in the Obama administration, and that's true in the Trump administration."

Hunter said that in some cases, the government benefits from close relationships with private business, for example, when agencies work with private researchers to develop new technology.

"Of course, the risk is that when the agency that regulates in nature works closely with a company over an extended period, the concern is that it can undermine its independence," Hunter said.

Robyn, Former Clinton Adviser said she was known as "Ms. Boeing" at the White House for her intervention on a variety of business issues, from titanium imports to relationships with machine associations. She said the focus came from Clinton herself.

"If the economist made an article about the Boeing-Airbus competition, he would emphasize and pass it on to my boss …," she said. "He was over it. And it was about jobs."

U.S. Transport officials are still pushing for details of why the Ethiopian Airways Boeing 737 Max 8 jet crashed. The Congress is a demanding response to the Federal Aviation Administration's oversight of Boeing, especially after the FAA did not move faster to restrict the company's aircraft, instead waiting for regulators in Europe, China, Australia and elsewhere to do so.

Muilenburg spoke to Trump twice a week after the Ethiopian crash to reassure him of the safety of the aircraft, which raises concerns that the company may have undesirable influence on security issues. Larry Kudlow, director of Trump's financial advice, said their conversation should not be interpreted.

Tramp talked about C-SPAN's "Newsmakers" program saying that Trump sent a strict message to Muilenburg and that the decision to move the plans "has nothing to do with commercial considerations as far as we are concerned. to do with security concerns. "

Acting FAA administrator Daniel K. Elwell on the" Today "show Friday defended the speed that US regulators moved to earth and said it was not until they received additional information that they felt Rest assured that a link between a Lion Air crash in Indonesia in October, also with a Boeing 737 Max and March 10, the Ethiopian Airways crash was "close enough".

"You have to establish more than one intestinal feeling that two breakdowns are related before you measure an entire fleet," he said.

US deaths from aircraft accidents remain very rare, in a speech at an Air Safety Forum last year, Elwell pointed out The country has passed more than nine years, or about 90 million non-fatal flights.

In response to questions about the agency's relationship with Boeing, the FAA issued a statement crediting it to "current outstanding security record."

"The Approach We Having used over the years is the same approach that has served us well. Security is always, and will be, our top priority. "

Randy Babbitt, who led the FAA during Obama from 2009 to 2011, approved this notion." It used to be years ago that the plane crash was almost a routine thing. It was like hearing about a car accident, he said. "The reason there is so much attention around the latest crashes is evidence of how safe the system is."

For a long time, Boeing has been a stalwart aircraft carrier for the US military and built nearly 100,000 aircraft for World War II. In recent years, Boeing has pursued a wider range of military contracts, but not without controversy.

Boeing secured several major defense contracts this fall, marking a reversal after losing competitions to make F-35 fighter and B-21 bombs to Lockheed Martin and Northrop Grumman respectively.

Boeing would also be the recipient of more than $ 1 billion Pentagon requested in the Trumps 2020 budget proposal to buy eight F-15X fighter jets. Senior Air Force officials said they were against the expenses and said the money would be better spent buying from Lockheed Martin more F-35 fighters, unlike the F-15X equipped to avoid eternal air defense.

There are signs of carelessness on the part of the company, now the leading defense contractor in federal sales, and whether the firm meets its obligations to the military.

On Friday Will Roper, an assistant secretary of the Air Force, told a housekeepers subcommittee that he visited Boeing this week after air weapons were impoverished with the amount of garbage, tools, and other items left in new KC-46 tankers. that Boeing delivered.

Boeing began delivering tankers in January, two years late and some $ 3 billion over budget. Foreign debris can be sucked through a plane's engines and damage or destroy them.

"To put it all, this is unacceptable," Roper told lawmakers. "FOD, or foreign matter, is something we treat very seriously in the Air Force. Our flight is spotlessly clean. Our depots are spotless because debris translates into a security issue."

Roper said he and other service personnel underwent Boeing's correction plan and came away satisfied. Boeing issued a statement saying: "Safety and quality are our top priority. We are committed to delivering FOD-free aircraft to our customer and have an agreed action plan in place."

Shanahan, who has almost no government experience , has withdrawn from problems related to Boeing. Pentagon officials did not respond to a request for comment.

The close relationship between the Pentagon and Boeing is part of a long-lasting revolver culture where senior defense officials move back and forth between government jobs and defense contractors.

In 2004, Darleen Druyun, a highly qualified air force procurement manager, was sentenced to prison after admitting she approved a purchase of 100 Boeing petrol aircraft at an inflated price of about $ 20 billion to improve her job with the company. She also leaked proprietary pricing information from a competitor and helped Boeing secure his own $ 4 billion as a thank you for hiring her daughter and future son-in-law.

Druyun pleaded guilty to the charges and acknowledged giving special treatment to Boeing. But recordings showed that Boeing's leaders also played a role and pushed forward with work discussions after Druyun suggested she had to wait. Boeing commissioned her own scandal review and discovered weaknesses related to her practice of hiring former state employees.

Boeing employed in 84 former defense ministry officials as either executives, board members or lobbyists, according to a report last year from the public oversight project. It dwarfed the 55th that Boeing competitor Lockheed Martin had on his employees.

The author of the report, Mandy Smithberger, said that revolving door solves the issue of US officials – regulators among them – hesitate to say no to Boeing for fear

"It raises the question of whether they are pulling their blows to protect their potential hiring the company when they leave the government, "she said.

Despite the current discomfort of Boeing's possible failure in 737 Max, Trump has largely endorsed its predecessors to become a leading seller for the company.

On a earnings call with investors in 2017, Muilenburg said about the company's relationship with the president: "We have had the privilege of having a very open dialogue with him on business issues."

Six months earlier, at a Boeing facility In South Carolina in 2017, Trump ended his remarks to the public with this: "God bless you, God must bless the United States, and God bless Boeing."

Damian Paletta, Christian Davenport, Karoun Demirjian and Aaron Gregg contributed to this report.



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