Boeing Company

737 Max Jet Will Resume Flights After Electrical Fix, Boeing Says

Boeing says it has received approval from U.S. aviation authorities for proposed fixes to an electrical problem that grounded a portion of its troubled 737 Max fleet for more than a month. The approval is welcome news for the handful of affected airlines in the United States, where the industry is preparing for a busy summer.

The 737 Max plane was initially grounded in March 2019 after a pair of crashes, separated by months, in Indonesia and Ethiopia. Last November, the Federal Aviation Administration cleared the fleet to fly again provided that Boeing and airlines updated the Max’s flight control software and rerouted some electrical wiring, among other changes.

In December, the plane carried paying passengers in the United States for the first time since the crashes. But last month, Boeing said it had notified 16 airlines and other customers of a potential electrical problem with the Max and recommended that they temporarily stop flying some planes.

Boeing and the F.A.A. said last month that the latest electrical issue was unrelated to the 2019 grounding directive.

said in a notice that the electrical power systems on a new 737 Max 8 airplane “did not perform as expected” during routine tests before it was delivered to an airline. It said the same issue affected certain models of the 737 Max 8 and the 737 Max 9.

Specifically, the notice, known as an airworthiness directive, said design changes to support panels in the Max’s flight deck, or cockpit, had resulted in “insufficient electrical grounding of installed equipment.”

The problem could have resulted in loss of critical functions and other problems on the flight deck, the notice said. It directed Boeing to send comments about proposed modifications by mid-June.

Boeing said in a brief statement on Wednesday that it had received final approval from the regulator for the proposed modifications and issued “service bulletins for the affected fleet.” Airline manufacturers typically issue service bulletins to notify a plane’s owner about a change or improvement in a component.

Boeing also said that airlines were preparing to return the affected jets to service and that it planned to resume deliveries of the plane. The company did not provide a timeline or further details.

reported earlier by The Wall Street Journal.

Boeing also appeared to make progress this week on another issue affecting a different model of plane, the 777. Dozens of 777 planes equipped with a Pratt & Whitney engine were grounded worldwide in February after one suffered an engine failure over Colorado. Video of the episode was startling, though the pilots landed the plane safely and no injuries were reported.

After that engine failure, the F.A.A. required that all fan blades in that type of engine be inspected. On Wednesday, the agency’s administrator, Steve Dickson, said the agency was also requiring that manufacturers strengthen the engine cowling, or housing. The “exact timing and requirements” of such a fix had not been determined, the agency said in a statement.

The 2019 crashes aboard the 737 Max killed 346 people and deeply damaged Boeing’s once-sterling reputation. The company later fired its chief executive and paid billions of dollars in fines, settlements and lost orders.

In January, Boeing agreed to pay more than $2.5 billion in a legal settlement with the Justice Department stemming from the 737 Max debacle. The agreement resolved a criminal charge that had centered on the actions of two employees who withheld information from the F.A.A. about changes made to software that was later implicated in both crashes.

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C.E.O. Pay Remains Stratospheric, Even at Companies Battered by Pandemic

And, according to security filings, a select few are rapidly accumulating new fortunes. Chad Richison, founder and chief executive of an Oklahoma software company, Paycom, is worth more than $3 billion and was awarded $211 million last year, when his company made $144 million in profit. John Legere, the former chief executive of T-Mobile, was awarded $137.2 million last year, a reward for taking over the rival Sprint.

“We’ve created this class of centimillionaires and billionaires who have not been good for this country,” said Nell Minow, vice chair of ValueEdge Advisors, an investment consulting firm. “They may build a wing on a museum. But it’s not infrastructure — it’s not the middle class.”

The gap between executive compensation and average worker pay has been growing for decades. Chief executives of big companies now make, on average, 320 times as much as their typical worker, according to the Economic Policy Institute. In 1989, that ratio was 61 to 1. From 1978 to 2019, compensation grew 14 percent for typical workers. It rose 1,167 percent for C.E.O.s.

The pandemic only compounded these disparities, as hundreds of companies awarded their leaders pay packages worth significantly more than most Americans will make in their entire lives.

“To my mind, they’re the logical consequence of our total embrace of shareholder capitalism, starting with the corporate raiders of the 1980s, to the exclusion and sacrifice of all else, including American workers,” said Robert Reich, a labor secretary under President Bill Clinton. “The pay packages reflect soaring share prices, which in turn reflect, at least in part, the willingness if not eagerness of corporations to cut payrolls at the slightest provocation.”

AT&T, the media conglomerate, lost $5.4 billion and cut thousands of jobs throughout the year. John Stankey, the chief executive, received $21 million for his work in 2020, down from $22.5 million in 2019.

T-Mobile said it would create new jobs through its merger with Sprint, but has already begun layoffs. It made $3.1 billion in 2020. In addition to Mr. Legere’s windfall, the company awarded its current chief executive, Mike Sievert, $54.9 million.

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‘It’s a Roller-Coaster Ride’: Global Chip Shortage Is Making Industries Sweat

Dan Rozycki, the president of a small engineering firm, worries about what a global semiconductor shortage could mean for curing concrete.

Mr. Rozycki’s company, Transtec Group in Austin, Texas, sells small sensors that are placed where concrete is poured at building, highway and bridge construction sites. The gadgets take temperature readings and wirelessly send data so workers with computers can ensure the material is hardening properly.

Like many other things in the modern world, from computers and cars to cash registers and kitchen appliances, the sensors require a couple of common, inexpensive semiconductors that have suddenly become a very scarce commodity.

“Every month our product is getting more popular,” Mr. Rozycki said. “But we may not be able to make it in several months.”

Shortages of semiconductors, fueled by pandemic interruptions and production issues at multibillion-dollar chip factories, have sent shock waves through the economy. Questions about chips are reverberating among both businesses and policymakers trying to navigate the world’s dependence on the small components.

Chip supply limitations are far from a new phenomenon. But past problems have typically concerned particular kinds of chips, like the types that help store computer memory or process vast amounts of data. This time, customers are also scrambling to find an array of simpler chips made in older factories. And those factories are difficult to upgrade.

ordered a 100-day review of the semiconductor supply chain, a process that drew chief executives of 19 big companies to a virtual meeting Monday. Congress has backed legislation aimed at spurring more domestic chip manufacturing to reduce dependence on Taiwan and South Korea, which Mr. Biden has proposed funding with $50 billion in his infrastructure plan.

Most attention has focused on temporary closings of big U.S. car plants. But the problem is affecting many other sectors, particularly the server systems and PCs used to deliver and consume internet services that became crucial during the pandemic.

Pat Gelsinger, the new chief executive of the chip maker Intel, who attended the meeting with the president on Monday. “People are begging us for more.”

The chip shortage potentially affects just about any company adding communications or computing features to products. Many examples were described in 90 comments filed to the Biden supply chain review by companies and trade groups, including a laundry list of needs from industry giants like Amazon and Boeing.

The personal computer giant HP said the shortage of semiconductors had prevented the company from being able to meet demand for computers ordered by schools. Rising chip prices also have made it harder to offer affordable hardware for less-wealthy school districts during the pandemic, the company said.

Mr. Rozycki’s engineering firm in Austin is for now among the lucky chip users. It planned ahead and has enough chips to keep making the roughly 50,000 sensors it supplies each year to construction sites. But his distributor has warned him it might not be able to deliver more of them until late 2022, he said.

“Is that going to halt those projects?” Mr. Rozycki asked. He is scouring the market for other distributors that might have the two needed chips in stock. Other possibilities include redesigning the sensors to use different chips.

drought in Taiwan and a cold snap in Texas that temporarily shut down factories operated by Samsung Electronics, NXP Semiconductors and Infineon.

“It’s hell on earth right now,” said Frank McKay, chief procurement officer at Jabil, which buys billions of dollars’ worth of chips each year to assemble products for customers that include Apple, Amazon, Cisco Systems and Tesla.

On any given day, he said, his company is facing shortages of 100 or so components and has to use all its negotiating power to get them — successfully so far. “But it’s a roller-coaster ride every day,” Mr. McKay said.

Fixing other issues is likely to stretch into 2022. Mr. Gelsinger said Intel was talking to auto industry suppliers about shifting some production of their chips to older Intel factories, possibly starting in six to nine months. But adding new production tools to an existing chip plant can take a year. Building a new one takes three years.

“This is going to be a long healing,” said Thomas Caulfield, chief executive of GlobalFoundries, a big U.S. chip manufacturer that is doubling capital spending this year so it can meet demand.

For now, chip delivery schedules have stretched from around 12 weeks to more than a year in some cases, chip buyers and brokers said. That is bad news for companies like the webcam start-up Wyze Labs.

“We’re going to be straight up with you about some bad news we got this week,” the company wrote in a note to customers in January. “Some of our key suppliers informed us they would only be able to supply about one-third of the chips we need to make Wyze Cams.”

The company, which is based in Kirkland, Wash., predicted problems stocking the third version of its flagship webcam. The company website says it is sold out, with more inventory expected in one to two weeks. Wyze did not respond to requests for additional comment.

Supply problems can be a touchy topic, said Zach Supalla, chief executive of Particle, a San Francisco company that buys chips to make communication and computing equipment. It sells its devices to thousands of companies that make products like hot tubs, air-conditioners and industrial and medical equipment.

Particle has so far has secured enough chips to keep making its products, he said. But the company is asking customers to order further and further in advance to ensure it can meet demand, Mr. Supalla said.

When chips can be found, price markups can be stark. One particularly unglamorous widget, a type of ceramic capacitor that ordinarily sells for around 3 cents each, became hard to find when a Covid-19 outbreak temporarily closed a factory in China.

The capacitor shortage hurt production of a popular cellular modem. That modem, which normally sells for $10 to $20, spiraled to $200 on the spot market, Mr. Supalla said. Customers like car companies may be willing to pay such sums to keep producing $40,000 cars, Mr. Supalla said. But not all can.

Some buyers suspect profiteering. Jens Gamperl, chief executive of an online components exchange called Sourcengine, recounted a call from an executive who fumed that a chip normally priced at $1 each was listed for sale by the exchange at $32. Mr. Gamperl had to explain that his own company had been forced to pay $28 for the component.

“That is the kind of craziness that we see left and right now,” he said.

Besides the direct effect on hardware makers, chip shortages can reduce shipments and raise the cost of servers and networking equipment to offer services like streaming entertainment, remote learning and medicine. They can also affect software makers.

Tripp, a Los Angeles start-up that makes a kind of meditation app that exploits virtual-reality headsets from Sony and others, was banking on the new PlayStation 5 to lift software demand, said Nanea Reeves, Tripp’s chief executive. But chip shortages helped to hobble that console launch.

“We were expecting a bigger bump from the PS5,” she said. The company is hoping more consoles arrive in the second quarter.

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Boeing Tells Airlines to Stop Flying Some 737 Max Planes

Just months after returning to the skies, Boeing’s troubled 737 Max jet is facing another setback.

Boeing said Friday that it had notified 16 airlines and other customers of a potential electrical problem with the Max and recommended that they temporarily stop flying some planes. The company refused to say how many planes were affected, but four U.S. airlines said they would stop using nearly 70 Max jets. Boeing would not say how long the planes would be sidelined.

Airlines and Boeing have tried hard in the last several months to convince passengers that the Max is safe. This latest problem is sure to spur further doubt among some travelers about the plane.

“It’s a Max, so everybody is interested and that makes perfect sense, but this is the aviation maintenance system working the way that it should,” said John Cox, a former airline pilot and crash investigator and chief executive of Safety Operating Systems, an aviation consulting firm.

Boeing said the affected airlines should verify that a component of the electrical power system on certain Max planes was sufficiently fastened. Airlines had resumed flying the jet after it was grounded for nearly two years because of a pair of accidents that killed nearly 350 people.

have complained of careless practices there in the past, including debris left dangerously close to electrical wiring of the 787 Dreamliner, a large plane used on long flights.

The families of those killed in the crashes have been critical of both Boeing and the F.A.A., saying neither has done enough to root out the problems that caused the crashes.

“Boeing proclaims to be a changed company, but it’s clear their culture is built around cutting corners and putting profits over safety,” Yalena Lopez-Lewis, whose husband, Antoine, died in the crash in Ethiopia, said in a statement on Friday. “Since the deaths of 346 people, their sole focus has not been safety but to perform the bare minimum for regulators to allow it back in the air. This grounding illustrates that the Max is still unsafe to fly.”

After working to fix the Max and restore its credibility with airlines and regulators for much of the past two years, Boeing has been on an upswing in recent weeks. United said it was speeding up deliveries of the Max and expanding its order to 180 planes in the coming years. Europe and the United States agreed to temporarily suspend tariffs in a long-running dispute over Boeing and its rival Airbus. And February was the first month in more than a year in which Boeing reported net positive commercial airplane sales.

The company’s stock is up about 17 percent for the year.

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Electric Aircraft Start-Up Accuses Rival of Stealing Its Secrets

The age of electric planes may still be years away, but the fight for that market is already heating up.

Wisk Aero, a start-up developing an electric aircraft that takes off like a helicopter and flies like a plane, on Tuesday sued another start-up, Archer Aviation, accusing it of stealing trade secrets and infringing on Wisk’s patents.

The lawsuit brings into public view a dispute between two little-known companies in a business that has become a playground for billionaires. It also entangles giants of aviation and technology. Wisk is a joint venture of Boeing and Kitty Hawk, which is financed by Larry Page, who co-founded Google. Archer’s investors include United Airlines, which is a major Boeing customer and plans to buy up to 200 aircraft from the start-up.

The niche market for electric vehicles and planes has become frenzied in recent months as so-called blank check companies, which have little more than a stock market listing and a pot of cash, have snapped up fledgling businesses with little or no revenue, let alone profits. Investors in the blank-check firms — formally known as special purpose acquisition companies, or SPACs — are hoping to acquire businesses that they believe could follow Tesla’s recent trajectory on the stock market. To entice those investors, start-ups like Archer promise top-notch technology and optimistic business plans.

the lawsuit accuses two engineers of downloading thousands of files containing confidential designs and data before leaving Wisk to join Archer. Wisk accused a third engineer of wiping history of his activities from his computer before leaving for Archer.

“Wisk brings this lawsuit to stop a brazen theft of its intellectual property and confidential information and protect the substantial investment of resources and years of hard work and effort of its employees and their vision of the future in urban air transportation,” the lawsuit says.

Archer denied wrongdoing.

“It’s regrettable that Wisk would engage in litigation in an attempt to deflect from the business issues that have caused several of its employees to depart,” Archer said in a statement. “The plaintiff raised these matters over a year ago, and after looking into them thoroughly, we have no reason to believe any proprietary Wisk technology ever made its way to Archer. We intend to defend ourselves vigorously.”

Archer also said it had placed an employee accused in the suit on paid leave “in connection with a government investigation and a search warrant issued to the employee, which we believe are focused on conduct prior to the employee joining the company.” Archer said it and three employees who had worked with the individual had been subpoenaed in that investigation and were cooperating with the authorities.

accused one of its former employees and Uber of stealing trade secrets to gain an advantage in the race to develop autonomous cars. The companies settled the case in 2018, and the former Waymo employee, Anthony Levandowski, a onetime confidant of Mr. Page’s, was sentenced in 2020 to 18 months in prison. Former President Donald J. Trump pardoned Mr. Levandowski in January.

Archer announced its merger in February with a SPAC, Atlas Crest Investment, in a deal that valued the company at $3.8 billion. Wisk said its suspicions were confirmed at that time when Archer released a presentation that contained designs similar to those in a Wisk patent filing.

when announcing the transaction.

“We had 35, 40 people on this — and we attacked this like venture growth would or anybody else,” Mr. Moelis said. “And we did it fast, too.”

A spokeswoman for Moelis declined to comment.

Other companies trying to make electric aircraft include Joby Aviation, which announced a $6.6 billion deal with a SPAC led by the LinkedIn co-founder Reid Hoffman in February, and the German start-up Lilium, which went public last month by merging with a SPAC led by a former General Motors executive, Barry Engle.

according to SPAC Research — more than in all of 2020.

But regulators and some investors say more scrutiny is needed. The Securities and Exchange Commission published two notices last month warning companies considering merging with SPACs to ensure that they are ready for all the legal and regulatory requirements being a public company entails. Many investors known as short sellers, who specialize in betting that share prices of companies are bound to fall, have targeted SPACs like Atlas Crest, which is among the 20 most-shorted SPACs.

The market for electric aircraft is in its infancy but holds huge promise. The prospect of “Jetsons”-like flying vehicles has inched closer to reality in recent years thanks to advances in battery and aircraft design. A high-stakes race to build the first viable electric plane is underway, and some airlines are betting that such vehicles can help them reach their goals of eliminating or offsetting their greenhouse gas emissions.

Scott Kirby, the chief executive of United, said the Archer aircraft were unlikely to be used for commercial flights but were ideal for short trips to and from an airport.

“They’re not only more environmentally friendly, they’re far quieter than a helicopter,” Mr. Kirby said Tuesday during an event hosted by the Council on Foreign Relations. “And, because they have 12 rotors, they’re, I believe, going to ultimately be safer.”

Still, widespread use of electric air taxis is likely years away. Such aircraft may never become more than a luxury used by very rich people because businesses and governments may come up with far cheaper ways to transport people without emissions.

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Cockpit Recorder From Indonesian Crash Is Finally Recovered

BANGKOK — Nearly three months after Sriwijaya Air Flight 182 crashed into the Java Sea, Indonesian officials announced Wednesday that they had recovered the memory module of the aircraft’s cockpit voice recorder by pumping up mud and sand from the seafloor.

The crucial memory unit, which apparently broke loose from the cockpit voice recorder on impact, could reveal the final words of the pilot and co-pilot as the Boeing 737-500 plummeted into the sea on Jan. 9.

The module was recovered Tuesday night and brought to shore Wednesday by a Coast Guard ship. Officials said they believed the module was still functional and that it would take three days to a week to download and read its data.

The aircraft crashed minutes after taking off from Soekarno-Hatta International Airport near Jakarta, the Indonesian capital, killing all 62 people aboard, including six active crew members.

difference in the level of thrust between the plane’s two engines might have contributed to the aircraft rolling over before it plunged into the sea.

A difference in the level of thrust — the force of the engines that propels the aircraft forward — can make planes difficult to control, but it is unclear why that problem may have occurred during the Sriwijaya flight.

Officials hope that the recovered memory module will shed some light on why the pilot and co-pilot were unable to recover control of the plane, which plummeted more than 10,000 feet in less than a minute.

“Without the cockpit voice recorder, it would be very difficult to know the cause in this Sriwijaya 182 case,” Mr. Soerjanto said.

The Sriwijaya aircraft was the third to crash into the Java Sea in just over six years after departing from airports on Java, one of Indonesia’s five main islands.

In December 2014, Air Asia Flight 8501 crashed into the Java Sea off the coast of Borneo with 162 people aboard as it flew from the Indonesian city of Surabaya to Singapore. Investigators eventually attributed the disaster to the failure of a key component on the Airbus A320-200 and an improper response by the flight crew.

nose-dived into the Java Sea northeast of Jakarta minutes after taking off for Pangkal Pinang with 189 aboard. Investigators concluded that the anti-stall system malfunctioned on the Boeing 737 Max, a newer model than the Boeing that crashed in January.

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Boeing sold more planes than were canceled last month as it regains its footing.

Boeing said on Tuesday that it sold 31 airplanes in February after accounting for cancellations, the first month in more than a year that the aerospace giant had positive sales, suggesting that it is starting to regain its footing after the 737 Max crisis.

The Max was banned from flying passengers two years ago this week after a total of 346 people died in a pair of crashes aboard the plane, prompting intense scrutiny of the plane and the company. But late last year, the Federal Aviation Administration lifted its ban on the plane, allowing the Max to begin carrying passengers again after required changes are made.

Most of the world’s 190 aviation authorities have now approved the Max to fly again, according to Boeing, and 14 airlines have used the plane for more than 9,000 flights.

Sales of the plane have rebounded, too. On Tuesday, Boeing said it had received 82 new airplane orders in February, about half of them for the Max, including a large order from United Airlines. Another 51 aircraft orders were canceled, and the company now has 4,041 orders in its backlog.

It was Boeing’s first month of positive sales since November 2019, but its difficulties are far from over.

The coronavirus pandemic has ravaged the travel sector, prompting airlines to cancel orders and rethink plans to expand or update their fleets. And Boeing has also halted deliveries of the 787, a twin-aisle plane, amid quality concerns.

And the company is facing lawsuits over the Max from shareholders who say it mismanaged its response to the crisis and the families of those who were killed.

The first Max crash occurred in October 2018 in Indonesia. The second happened two years ago this Wednesday in Ethiopia. To mark that grim milestone, the families of people who died in the crashes plan to host a vigil outside the F.A.A. in Washington, and some are scheduled to meet the transportation secretary, Pete Buttigieg, to discuss their concerns about the safety of the Max.

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U.S. and Europe Will Suspend Tariffs on Alcohol, Food and Airplanes

The United States and European Union agreed to temporarily suspend tariffs levied on billions of dollars of each others’ aircraft, wine, food and other products as both sides try to find a negotiated settlement to a long-running dispute over the two leading airplane manufacturers.

President Biden and Ursula von der Leyen, the president of the European Commission, agreed in a phone call on Friday to suspend all tariffs imposed in the dispute over subsidies given to Boeing and Airbus for “an initial period of four months,” Ms. von der Leyen said in a statement.

“This is excellent news for businesses and industries on both sides of the Atlantic and a very positive signal for our economic cooperation in the years to come,” she said.

In a statement, the White House said Mr. Biden had “underscored his support for the European Union and his commitment to repair and revitalize the U.S.-E.U. partnership.”

had authorized both the United States and Europe to impose tariffs on each other as part of two parallel disputes, which began almost two decades ago, over subsidies the governments have given to Airbus and Boeing. The E.U. had imposed tariffs on roughly $4 billion of American products, while the United States levied tariffs on $7.5 billion of European goods.

The aircraft dispute is an early test of the Biden administration’s ability to rebuild America’s relationship with Europe, which U.S. officials see as crucial for accomplishing other trade and foreign policy goals.

Former President Donald J. Trump took a more adversarial and aggressive stance toward the bloc. He accused it of cheating the United States on trade and imposed tariffs on European metals, aircraft and other products. He also threatened further tariffs against European automakers.

The Biden administration has said it would restore ties with the E.U., formerly a close ally, as it seeks to form coalitions to take on bigger global problems, like China’s unfair trade practices. And it has committed to pressing Europe for a settlement on the aircraft dispute, as well as other continuing trade spats over metals, digital service taxes and other issues.

temporarily suspend tariffs levied against the United Kingdom, including on Scotch whisky, as part of the dispute for a period of four months.

Monika Pronczuk and Liz Alderman contributed reporting.

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