Boeing's 737 Max jets not safe for use > Profits trump safety - Former Managers

 

Ex-senior Boeing manager warns flyers to avoid

737 MAX 9 jets: ‘I would absolutely not fly a MAX airplane’

By 

Social Links forMelissa Koenig

Published Jan. 31, 2024

 Updated Jan. 31, 2024, 11:04 a.m. ET

Former high-level Boeing managers and engineers have issued startling warnings for flyers to avoid the airplane giant’s troubled 737 MAX 9 jets as the model once again takes to the skies.

“I would absolutely not fly a MAX airplane,” one-time senior Boeing manager Ed Pierson bluntly told the Los Angeles Times of the model that recently saw a door plug blow out in midair on an Alaska Airlines flight.

“I’ve worked in the factory where they were built, and I saw the pressure employees were under to rush the planes out the door.”

Joe Jacobsen, a former Boeing engineer who has also worked at the Federal Aviation Administration (FAA), gave a similar warning, saying it was “premature” for airlines, including Alaska, to have resumed flying the jets.

“I would tell my family to avoid the MAX,” Jacobsen told the LA Times, claiming that his time at the company made him realize that profits were prioritized over quality control.

“I would tell everyone, really.”

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Ed Pierson, a former senior manager at Boeing, said he “would absolutely not fly a MAX airplane.”

KIRO 7 News

Boeing’s planes were temporarily grounded for a federal inspection earlier this month after an Alaska Airlines plane was forced to make an emergency landing when a section blew out in mid-flight — whipping the shirt off a young passenger.

President and CEO David Calhoun admitted days later that a “quality escape” had occurred, telling employees: “This event can never happen again.”

On Wednesday, he emailed employees, conceding that “scrutiny” from the accident “makes it absolutely clear that we have more work to do” to “strengthen our safety and quality processes.”

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An investigator examines the frame on a section of Alaska Airlines Flight 1282 missing a panel on a Boeing 737-9 MAX in Portland, Oregon.

AP

Pierson said he had “tried to get them to shut down” even before 2018, when a Lion Air jetliner crashed into the Java Sea, killing all 189 people aboard.

In September, Pierson’s Foundation for Aviation Safety also published a study that found that airlines filed more than 1,300 reports about safety problems on Boeing’s MAX 8 and MAX 9 airplanes with the FAA.

Jacobsen, meanwhile, said the airplane manufacturer has been “trying to maximize profits” and “go with the lowest bidder” for years.

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Flight 1282 was forced to return to Portland International Airport on Friday, Jan. 5, 2024.

AP

“For the last 20 years, they’ve gone in this continual direction of towards financial engineering instead of technical engineering,” Jacobsen said, arguing the company was basically playing a game of Whack-a-Mole in which it would only fix issues once a problem began to emerge.

The National Transportation Safety Board is expected to release its preliminary findings about the Alaska Airlines near-disaster in the coming days.

The FAA has already allowed airlines to once again start flying Boeing MAX planes following its own “exhaustive [and] enhanced review.”

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Former Boeing employee Joe Jacobsen called the return of 787 MAX 9 jets “premature.”

AP

“Let me be clear: This won’t be back to business as usual for Boeing,” Administrator Mike Whitaker said in a statement last week.

“The quality assurance issues we have seen are unacceptable. That is why we have more boots on the ground closely scrutinizing and monitoring production and manufacturing activities.”

Alaska Airlines officials said it would fly the MAX 9s “only after the rigorous inspections are completed and each plane is deemed airworthy according to FAA requirements.”

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Boeing CEO Dave Calhoun departs after a meeting in the office of Sen. Mark Warner (D-Va.) at the Capitol in Washington, Wednesday, Jan. 24, 2024.

AP

About half of those inspections were completed by the end of last Monday, airline officials said, and its first MAX 9 departed from Seattle, Wash., on Friday and landed in San Diego, Calif., about an hour late.

United also started flying its MAX 9 fleet Saturday morning, with a flight from Newark, NJ, to Las Vegas, Nev.

But Jacobsen, the former FAA engineer, said the agency’s decision to allow the planes to fly again was “premature,” noting that he and other safety advocates have been sounding the alarm on numerous safety issues on both the MAX 8 and MAX 9 planes for years.

In fact, the FAA warned pilots last year to limit the use of an anti-ice system to just five minutes, after a serious defect was discovered in its engine that could cause debris to break off and “result in loss of control of the airplane.”

Boeing was seeking an engineering exemption from the FAA to exclude the MAX 7s from the line that needed to change its anti-ice system, but withdrew its petition on Monday.

The company is expected to release its fourth-quarter earnings in a call to investors Wednesday. Its stock prices have fallen about 19% since the midair blowout on Jan. 5.

In his email to employees Wednesday, Calhoun noted “tough and direct conversations with our customers, regulators and lawmakers” who are “disappointed.”

“We’ve taken significant steps over the last several years to strengthen our safety and quality processes, but this accident makes it absolutely clear that we have more work to do,” he acknowledged.

“This increased scrutiny — whether from ourselves, from our regulator, or from others — will make us better,” he told his staff.

“We have a serious challenge in front of us — but I know this team is up to the task.”

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US Big Pharma Allowed to Continue Hiding ‘Intimidating’ Price Info from Customers in TV Ads

Corruption is Everywhere - While this may not technically fit the definition of corruption, what do you call it when Congress puts the profits of lobbyists over the welfare of the people they are supposed to be serving?

© Pixabay / TBIT

A federal judge has stepped in to save drug companies from a new rule that would have forced them to disclose drug prices in TV ads, ruling that the Department of Health and Human Services lacks authority over the industry.

“No matter how vexing the problem of spiraling drug costs may be, [Health and Human Services] cannot do more than what Congress has authorized,” US District Court Judge Amit Mehta ruled on Monday, blocking the order, which was due to go into effect on Tuesday.

Amgen, Merck, and Eli Lilly, three of the largest US drug companies, and the Association of National Advertisers filed the lawsuit last month, claiming HHS lacked the legal authority to enforce the rule, which would have mandated that pharmaceutical ads display the list price of a 30-day supply of any drug covered under Medicare or Medicaid costing more than $35. The suit also claimed the order violated their First Amendment rights to freedom of speech, but Mehta’s ruling didn’t address that argument.

Drug companies complained the rule would “confuse” and “intimidate” patients because insurers, including Medicare and Medicaid, negotiate discounts with drug companies, meaning the list price, often much higher, could cause sticker shock. But that argument got little sympathy from HHS secretary Alex Azar, who told the companies when he announced the rule in May:

If you’re ashamed of your drug prices,

change your drug prices. It’s that simple.

The US is one of only two countries worldwide where direct-to-consumer advertising of prescription drugs is legal, and it is a massive market – $5.2 billion in 2016, according to CBS. According to HHS, the 10 most-advertised drugs have list prices from $488 to $16,938 per month or for a typical therapeutic course, numbers that would surely terrify the average consumer. 

President Donald Trump has made lowering the costs of prescription drugs one of his signature domestic issues, and the HHS rule was designed to bring those costs down, under the reasoning that pharmaceutical companies would be so embarrassed to float those gargantuan numbers on their ads that they’d cut the prices voluntarily.

Much of pharmaceutical advertising remains TV-based and the pharmaceutical industry has argued that it should be allowed to include pricing information on a dedicated website named in the ad. While it might seem absurd to expect consumers to drop everything and open their web browsers after seeing a TV ad they weren’t looking for in the first place, drug companies’ influence in Congress – they spent $4.1 billion on lobbying over the last 20 years, according to OpenSecrets.org, more than any other industry – means they tend to get what they want.

And the people have to pay the exorbitant profits of big pharma as well as the lobbying money that goes into the pockets of the country's lawmakers. As if they weren't already paying them enough.

Drug Company Raises Everyday Vitamin Price by 800 Percent

Astonishing Corporate Greed

© Global Look Press

Following the lead of pharma-bro Martin Shkreli, a US drug company has hiked the price of a prescription version of vitamin B3 pills by over 800 percent. A drug used to treat respiratory ailments also got a price hike of nearly 2,500 percent.

Avondale Pharmaceuticals raised the price of Niacor, a prescription-only version of niacin (vitamin B3), by 809 percent last month. This means a bottle of 100 tablets went from costing $32.46 to $295, according to figures sent to the Financial Times.

While the drug is available over the counter, some doctors prefer to prescribe a version that has US Food and Drug Administration approval. The drug is used to lower cholesterol to reduce the chance of having a heart attack.

Doctors need to stop prescribing Niacor and recommend over the counter versions of B3.

The company also acquired another generic, SSKI, and increased its price by 2,499 percent, taking a 30ml bottle from $11.48 to $295.

The Birmingham, Alabama-based company raised its prices shortly after acquiring the rights to the drugs in a “buy-and-raise” deal made notorious by Martin Shkreli, the hedge fund investor recently convicted of securities fraud.

Shkreli became mired in controversy when he raised the price of a drug used by cancer and HIV patients by 5,500 percent.

The price hikes by Avondale were first noticed by Truven Health Analytics, according to The Independent.

According to the Financial Times, Avondale Pharmaceuticals was set up in August by a registered agent, Acrogen Pharmaceuticals, seemingly for the sole purpose of drug acquisition. Acrogen was started in 2016 by Mark Pugh, an executive behind several pharmaceutical companies.

“This is the latest example of an inefficient US market where the consumer, payer, and doctor don’t have all the information available to make a financially sound choice,” Michael Rae, CEO of Rx Savings, told FT. “They are caught in a web of inefficiency and are being taken advantage of.”

Price gouging is a controversial but established strategy whereby firms buy up the rights to a drug that faces little or no competition, before massively inflating the price and enjoying the profits.

It can't be that difficult to make this spectacular expression of greed illegal. These companies buy up rights, probably at inflated prices, and then dramatically raise their prices without adding anything to the product. Don't monopoly laws apply? 

At least, there should be a special tax, a dramatically inflated tax on the profit from the increase in prices of these drugs. The entire increase should be considered profit and therefore taxable. 

At best, these people should be thrown in jail and never allowed to work in the industry again. It is people like these who give the free-market system a black-eye and give ammunition to countries where there is no free-market system to criticize America and maintain their own forms of corruption.

Oil Co.s - Good Corporate Citizens or Greedy, Soulless, Bloodsucking Leeches?

Gas should be much cheaper with fall in oil prices, BMO says

Gasoline should be about 80 cents a litre, if historical correlations between crude and gas held true

CBC News 

Historic trends, if they held true today, should result in gasoline costs closer to 80 cents a litre based on the price of oil, the Bank of Montreal says.

It's not your imagination — gasoline prices in Canada should be a lot lower than they are right now.

That's according to Benjamin Reitzes, an economist at Bank of Montreal, who said the price Canadians pay at the pump should be a lot lower than it currently is based on the plunging price of a barrel of crude.

"With last week's plunge in oil fresh in my mind as I headed into the weekend, I couldn't help but notice how gasoline prices had ticked higher from the previous week," he wrote in a research note on Monday evening.

Despite Canada having one of the world's largest reserves of crude oil in the world, much of the gasoline that Canadians put into their cars — especially in Central Canada and on the East Coast — is based on crude oil that's been imported, most likely Brent crude from Europe.

Many factors go into the price of gasoline, but crude prices are a significant factor. And with crude prices plunging to under $35 US a barrel yesterday — a new six-year low — that should be affecting pump prices.

Except, it's not. At least, not as much as it should be.

"Simply, consumers don't appear to be reaping the full benefit of lower oil prices," Reitzes said, noting that Canadians are still paying more than $1 per litre in many markets, despite Brent crude prices falling to levels they haven't been at since 2008.

The following chart shows what Reitzes is talking about.

The price of gas and the price of oil have diverged this year, as this chart from a recent BMO report suggests.
(Bank of Montreal)

And it is not much different in the USA:

Throughout 2015, and especially recently, Canadian & US gasoline prices have diverged from crude. They are still correlated, but not as closely as they should be.

If historical trends were still true, gasoline should cost about 80 cents per litre in Canada with crude being where it currently is. Yet across the country, the national average gas price was 97.70 cents a litre, according to gasoline price website GasBuddy.com

One more thing - notice in the top chart the relationship between Canadian and American gas prices. Traditionally, Canada has been paying 30 to 35 cents per litre more than Americans, but in the last 2 years that discrepancy has risen to 40 to 50 cents per litre even as oil prices drop. Have refining cost increased substantially more in Canada than in the US?

Christmas bonus
"Talk of a Christmas bonus by way of cheaper gas prices may be disappointing due to weakness in the Canadian dollar and profit taking by speculators and refiners," GasBuddy's senior petroleum analyst Dan McTeague said.

"As most saw crude tumble last week, drivers expected further relief at the pumps, but got a surprising increase instead."

Worse still, the problem shows no signs of abating any time soon. Indeed, it could be about to get worse.

"Drivers in Vancouver and Victoria should look to an average three-cent increase per litre, with Edmonton, Calgary, Regina, Saskatoon, Winnipeg and the B.C. Interior following with an average two-cent bump," by this weekend, McTeague predicts.

"Toronto, Ottawa, London, Hamilton, most of Southern Ontario and Montreal set for a two-cent average hike, while the Maritimes and Newfoundland, which follow last week's market prices, should expect a three-cent increase for Thursday and Friday."

So if you are expecting a Christmas bonus from the oil companies, you had better have shares in them. The names Grinch, and Scrooge, are much too nice to call these wretched, conscienceless, pigs. 

Higher gas prices don't affect society evenly, it affects lower income people much more than others. Oil executives pad their multi-million dollar bonuses at the cost of health, nutrition and mobility of societies most fragile demographics. 

You make me sick! Merry Christmas.