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'Profitability ahead of safety & honesty’: Boeing faces shareholder lawsuit over 737 MAX crashes

'Profitability ahead of safety & honesty’: Boeing faces shareholder lawsuit over 737 MAX crashes
Boeing shareholders have filed a class action lawsuit against the aircraft maker, accusing it of withholding information on safety deficiencies in its 737 MAX planes which led to two deadly crashes within six months.

According to the lawsuit, filed in a Chicago federal court, the world’s largest aerospace group “effectively put profitability and growth ahead of airplane safety and honesty,” as it rushed the troubled plane to market in an attempt to challenge a similar product by its European rival Airbus. The complaint claims the company left out “extra” or “optional” features designed to prevent the Ethiopian Airlines and Lion Air crashes.

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The lawsuit, seen by Reuters, seeks damages for alleged securities fraud violations, as the latest crash of Boeing’s 737 MAX 8 jet, operated by Ethiopian Airlines, wiped about $34 billion out of the company’s market value. Chief Executive Dennis Muilenburg and Chief Financial Officer Gregory Smith are reportedly named among the defendants.

Boeing’s bestseller crashed on March 10 not far from the Ethiopian capital of Addis Ababa six minutes after takeoff on the way to Nairobi, Kenya. The tragedy, which killed 157 people, marked the second crash involving the same jet model in less than six months. In October, the same type of aircraft, operated by Indonesia’s Lion Air, crashed in the Java Sea shortly after takeoff, claiming the lives of 189 people.

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Earlier this week, the family of a US man who died as a result of the crash in Ethiopia filed a lawsuit against the corporation, accusing it of “corporate greed” and “serious misconduct.” The case is reportedly one of a growing number of claims against the giant in the wake of the two tragedies.

According to Boeing, aircraft orders from January through March saw a massive decline to 95 jets in contrast to the 180 ordered a year earlier, with no orders for the 737 MAX following the grounding across the globe. Last week, the company announced plans to axe monthly 737 production from 52 planes to 42, saying it was making progress on a 737 MAX software update to prevent further accidents.

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