The Inspector General’s office began investigating pricing for soap dispensers after receiving a hotline tip. In response, Boeing contested the findings, claiming the Inspector General’s comparisons were based on “basic commercial items” and do not reflect the parts designed specifically to meet the C-17’s military-grade specifications. Boeing stated that it is reviewing the report and is collaborating with the Air Force and Inspector General’s office to provide a comprehensive response.
The C-17 Globemaster, one of the U.S. military’s largest cargo planes, is essential for transporting troops, equipment, and humanitarian aid in extreme conditions worldwide. Notably, it played a critical role in evacuating over 120,000 civilians from Afghanistan in 2021. Since 2011, Boeing has held contracts worth over $30 billion for supplying C-17 spare parts, a significant portion of the company’s defense portfolio.
However, this report is the latest setback for Boeing, which has struggled financially and reputationally due to issues with its best-selling 737 Max aircraft. In 2018 and 2019, the 737 Max was grounded following two fatal crashes, which led to increased scrutiny from federal regulators and new investigations. Earlier this year, Boeing faced further regulatory concerns after a door plug detached mid-flight on an Alaskan Airlines 737 Max.
In July, Boeing agreed to plead guilty to a charge of conspiring to defraud the U.S. government, stemming from misleading regulators about training requirements for the 737 Max. The case is pending in federal court in Texas. Boeing’s challenging year is reflected in its recent $6 billion third-quarter loss, attributed to costs across several key commercial, defense, and space programs.
Adding to Boeing’s troubles is an ongoing strike involving 33,000 union machinists, which has now lasted seven weeks, halting production of the 737, 777, and 767 models. As new CEO Kelley Ortberg oversees 17,000 layoffs and a plan to issue $19 billion in new stock to stabilize Boeing’s debt-laden balance sheet, the company faces an uphill battle to rebuild its finances and public trust.
