Former U.N Ambassador and South Carolina Governor Nikki Haley has resigned form the Board of Directors of Boeing, in protest of Boeing’s request for a $60 billion federal government bailout.
The following statement by Haley, dated March 16, 2020, was filed with the Securities and Exchange Commission as part of a Boeing filing:
March 16, 2020To: Dave Calhoun, CEOLarry Kellner, Chairman of the BoardMembers of the BoardI have had the pleasure of working with Boeing for almost ten years now. As South Carolina Governor I came to know the quality of the company, but more importantly, the excellence of the Boeing team and workforce. When I was asked to join the Board of Directors, there was no better team I could think of being a part of.As Boeing has gone through the difficulties of the MAX, I have appreciated the humility and transparency shown by the team to make sure that when the MAX is back in the air, it will be the safest, strongest plane ever flown.As we encounter the Covid-19 crisis, Boeing, along with many other companies, face another major set of challenges. I want to be part of helping the company as it pushes through it. However, the board and executive team are going in a direction I cannot support.While I know cash is tight, that is equally true for numerous other industries and for millions of small businesses. I cannot support a move to lean on the federal government for a stimulus or bailout that prioritizes our company over others and relies on taxpayers to guarantee our financial position. I have long held strong convictions that this is not the role of government.I strongly believe that when one is part of a team, and one cannot in good faith support the direction of the team, then the proper thing to do is to resign. As such, I hereby resign my position from the Boeing Board.I hope you all know that I will continue to be a strong supporter of Boeing and its workforce. All of you have taught me so much over the past year. Serving with each and every one of you has been a privilege. I value the friendships I have made with all of you.If I can ever be of help or service to the Boeing team in the future, please don’t hesitate to contact me.My very best,/s/ Nikki R. HaleyNikki R. Haley
Boeing is in a different, and weaker, position than other companies and industries seeking federal assistance. Boeing already was suffering from the safety failures of its 737 Max 8 airplane. Boeing also spent over $40 billion on stock buybacks:
Boeing’s free cash flow for 10 years totaled $58.37 billion, while the company spent $43.44 billion, or 74% of free cash flow, on stock repurchases.
Yet Boeing also is a major employer and defense contractor.
Compare that to the airlines and hotels, which were doing well but had their revenue stream stopped cold by the federal government. Those companies, having had their business models destroyed by the federal government arguably have a stronger claim to federal help.
Regardless, this is a bold move by Haley.
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