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Saturday, May 4, 2024

Boeing faces 10 more whistleblowers after two die

 The sky is falling — at least on Boeing.

A second whistleblower has died under mysterious circumstances, just two months after another one allegedly shot himself in the head — and the attorneys for both men hope their deaths don’t scare away the at least 10 other whistleblowers who want the company to clean up its act.

Joshua Dean, 45, a former quality auditor at Spirit AeroSystems which assembles fuselage sections for Boeing, died Tuesday morning from a fast-growing mystery infection.

Whistleblower Joshua Dean, 45, died unexpectedly from a fast-moving mystery illness last week – the second Boeing whistleblower to die suddenly within two months.Facebook / Taylor Rae Roberts

Dean’s death comes less than two months after Boeing whistleblower John Barnett, 62, died from an apparent self-inflicted gunshot wound on March 9.

Barnett, who had worked for Boeing for 32 years, was found dead in his Dodge Ram truck holding a silver pistol in his hand in the parking lot of his South Carolina hotel after he failed to show up for the second part of his testimony for a bombshell lawsuit against the company.

At the same time, Boeing said last month that it lost $355 million on falling revenue in the first quarter, another sign of the crisis gripping the aircraft manufacturer as it faces increasing scrutiny over the safety of its planes and accusations of shoddy work from a growing number of surviving whistleblowers.

It was announced abruptly in March that Boeing CEO Dave Calhoun would step down by the end of the year in a move widely seen as a reaction to the ongoing safety crises.

Boeing whistleblower John Barnett, 62, died from an apparent self-inflicted gunshot wound on March 9, the same day he was scheduled to continue to give testimony against Boeing in a bombshell lawsuit.NBC News

Brian Knowles, a Charleston, South Carolina, attorney who represented both Barnett and Dean hope their deaths were not in vain.

“These men were heroes. So are all the whistleblowers. They loved the company and wanted to help the company do better,” Knowles told The Post.

“They didn’t speak out to be aggravating or for fame. They’re raising concerns because people’s lives are at stake.”

Knowles and others inside the Boeing scandals are hesitant to speculate about conspiracy theories swirling around the two whistleblower deaths.

It was announced abruptly at the end of March that Boeing CEO Dave Calhoun would step down at the end of the year.Getty Images

“I knew John Barnett for seven years and never saw anything that would indicate he would take his own life,” Knowles told The Post.

“Then again, I’ve never dealt with someone who did (commit suicide.) So maybe you don’t see the signs. I don’t know.”

Knowles pointed out that the Charleston, SC police are still wrapping up their investigation of Barnett’s death — and that it may take some weeks for tests to reveal more about Dean’s passing.

“It’s a stunning loss,” Spirit AeroSystems spokesman Joe Buccino said of Dean. (The company is not to be confused with Spirit Airlines.) “Our focus here has been on his loved ones.”

The gaping hole in the fuselage plug area of Alaska Airlines Flight 1282 — a Boeing 737 Max 9 — which was forced to make an emergency landing on Jan. 5, 2024.via REUTERS
National Transportation Safety investigators examine the fuselage plug area that fell off an Alaskan Airlines flight in January.via REUTERS

Buccino insisted that Spirit “encourages” employees to come forth with their concerns and that they are then “cloaked under protection.”

A Boeing spokeswoman declined to answer questions on Barnett but in a statement, said that OSHA had determined Barnett was not retaliated against, and that the company’s own analysis found that the issues he raised “did not affect airplane safety.”

“We are saddened by Mr. Barnett’s passing and our thoughts continue to be with his family and friends,” the statement said.

Ed Pierson, a former senior manager at Boeing’s 737 factory in Renton, Washington, said he tried in vain to get Boeing bosses to shut down production of the plane before and after the two Max crashes in 2018 and 2019.AFP via Getty Images

“We encourage all employees to speak up when issues arise. Retaliation is strictly prohibited at Boeing.”

It’s news to other Boeing whistleblowers that Boeing and Spirit “encourage” workers to speak out.

Instead, they say, they’ve either been retaliated against — or ignored.

Ed Pierson, 61, a former senior manager at Boeing’s 737 factory in Renton, Washington, left Boeing six years ago and created the Foundation for Aviation Safety.

He had tried in vain to get Boeing executives to shut down production of the plane before the two Boeing 737 Max crashes in 2018 and 2019 that killed 346 people and led to the planes being grounded.

“It’s an unstable company right now from the top to the bottom,” Pierson told The Post. “Senior corporate leadership is so fixated on not admitting the truth that they can’t admit anything.”

Wreckage from Lion Air flight JT 610 lies at the Tanjung Priok port on October 29, 2018 in Jakarta, Indonesia. The Boeing 737 Max crashed shortly after takeoff, killing all 189 people aboard.Getty Images

Pierson did not mince words when he testified before Congress last month about what he called the “criminal cover-up” he believes Boeing bosses have led.

“Boeing is an American icon,” Pierson said. “This company is incredibly important to our country, both economically and in terms of national security with its commercial aviation side and it military defense work. But it doesn’t work when you have the wrong people driving the bus.”

Barnett was a quality control engineer who worked for Boeing for more than three decades before he retired in 2017.

He broke his silence two years later to warn that Boeing cut corners to speed its 787 Dreamliners into service and in numerous interviews described how he had complained internally to the company about what he claimed were serious safety flaws.

People stand near collected debris at the crash site of an Ethiopian Airlines Boeing 737 Max near Bishoftu, a town outside Addis Ababa, Ethiopia, on March 11, 2019. All 157 passengers on board were killed.AFP via Getty Images

After his apparent suicide in March, Boeing employees told The Post that Barnett had made “powerful enemies” and one said workers were skeptical that Barnett’s death was suicide.

Dean had raised the alarm in 2022, while working at Spirit AeroSystems, a Wichita, Kansas-based company which manufactures major aircraft parts for Boeing.

He was a quality auditor when he raised concerns about improperly drilled bulkhead holes on parts for the 737 Max.

But, he alleged, flagging the issue with his management had no effect.

Less than a year later he was fired.

Boeing’s 737 Max 9 jetliners were temporarily grounded in January after a door plug on an Alaskan Airlines plane suddenly broke off mid-flight while the aircraft was 16,000 feet in the air, forcing the flight to make an emergency landing in Portland, Oregon.REUTERS

“I think they were sending out a message to anybody else,” Dean later told NPR of his firing. “If you are too loud, we will silence you.”

Boeing has been dogged by whistleblower testimony and Congressional investigations.

scathing House report issued in Sept. 2020 found that the two 737 Max crashes were the “horrific culmination” of “repeated and serious failures” by the company and air safety regulators.

“Boeing was a Seattle company. Back in the day a typical Boeing CEO was a hyper-midwestern farm boy who saw airplanes as a kid and went off to Seattle to conquer the world,” Craig Jenks, who runs the Airline/Aircraft Projects Inc. consultancy, told The Post.

“Then the finance people started taking over in the 1980s and they moved the corporate headquarters to Chicago and then to DC. It means senior management is never around the factory floor.”

Dean had worked for Wichita, Kansas, based Spirit AeroSystems before becoming a whistleblower. The company makes Boeing fuselages then moves them by rail to Washington for assembly.REUTERS

The most headline-grabbing safety lapse was in January, when a fuselage panel blew off a new Alaskan Airlines 737 — although late last month, a safety slide fell off a Delta 767 and washed up, with perfect irony, in front of the home of an attorney suing Boeing over safety issues.

In the Alaskan airlines case, a whistleblower told the Seattle Times that the fault lay with Boeing, whose records showed that after the fuselage was delivered by Spirit, a panel had been removed at Boeing’s Renton factory and re-installed minus four crucial bolts.

In the air, the panel flew off — fortunately, at a low enough altitude that the plane did not depressurize.

“It is …very, very stupid and speaks volumes about the quality culture at certain portions of the business,” the whistleblower told the Seattle Times.

The emergency exit slide from a Delta 767 washed up, with perfect irony, outside the home of a New York attorney whose firm filed a lawsuit against Boeing following the Alaska Airlines door blowout in January.Jake Bissell-Linsk

A number of Boeing employees have alleged to the New York Times that the manufacturer has allowed mechanics to sign off on their own work, cutting out a layer of safety assurance.

“Profit has overtaken the historically famous pride of Boeing,” Peter Lake, an aviation expert who has investigated a number of plane crashes over the years, told The Post.

“It’s all corporate greed now. It’s become a standing joke that when there’s any malfunction in an airplane people say it’s Boeing.

“Southwest Airlines had an engine failure recently and people ignorantly blamed Boeing. That shows what a cloud the company is under.

“Who knows if they’ll be able to pull themselves out of this disaster?”

https://nypost.com/2024/05/04/us-news/boeing-faces-10-more-whistleblowers-after-two-die/

Cargill Recalls 8 Tons Of Ground Beef At Walmart Stores Nationwide Over Possible E. Coli

 Eight tons of ground beef, processed at a Cargill Meat Solutions plant in Pennsylvania and distributed to Walmart stores nationwide, have been recalled due to potential E. coli contamination. 

On Wednesday, the US Department of Agriculture's Food Safety and Inspection Service announced that 16,243 pounds of raw ground beef products may be contaminated with E. 

In recent days, Cargill shipped the raw ground beef to Walmart stores in a wide range of states, including Connecticut, Maryland, Massachusetts, New Hampshire, New York, North Carolina, Ohio, Pennsylvania, Vermont, Virginia, Washington, DC, and West Virginia. 

The recalled beef from Cargill includes:

  • All Natural Lean Ground Beef with lot code 117 (2.25 pounds)

  • Prime Rib Beef Steak Burgers Patties with lot code 118 (1.33 pounds)

  • Fat All Natural Angus Premium Ground Beef with lot code 117 (2.25 pounds)

  • Fat All Natural Ground Beef Chuck with lot code 118 (2.25 pounds)

  • Fat All Natural Ground Beef Chuck Patties with lot code 118 (1.33 pounds)

  • Fat All Natural Good Beef Sirloin Patties with lot code 118 (1.33 pounds)

This comes about one month after walnuts sold at Whole Foods were recalled for potential  E. coli contamination. 

Last month, Trader Joe's recalled fresh basil sold in 29 states and Washington, DC, due to dozens of cases of salmonella. 

The recent spate of food recalls, including the current ground beef recall, highlights the need for Americans to understand better the sourcing of their food. 

Here's what X users said about the recall: 

This calls for reevaluating food sources, moving away from big companies, and shifting towards more localized and transparent farming practices. 

https://www.zerohedge.com/commodities/cargill-recalls-8-tons-ground-beef-walmart-stores-nationwide-over-possible-e-coli

Data Centers Hiding In 'Spy Country' Northern Virginia Will Need Reactor's Worth Of Power

 Since the beginning of the digital age, most of the world's internet data has flowed through massive data centers in Northern Virginia. The area is known as "Data Center Alley" because it's home to the world's largest concentration of data centers. Some call the area 'spy country' because of the number of data centers used by the Central Intelligence Agency and other intelligence agencies. 

Given the exponential proliferation of smartphones, streaming services, smart devices, and now generative artificial intelligence, the power demanded by data centers in Northern Virginia will need nuclear reactors worth of power, if not much more, according to utility Dominion Energy.

On Thursday, Chief Executive Officer Bob Blue told investors on a company earnings call that "economic growth, electrification, and accelerating data center expansion" is boosting power demand across the area. 

Blue said, "The data center industry has grown substantially in northern Virginia in recent years," noting, "We've connected 94 data centers with over 4 gigawatts of capacity over the last approximately five years." 

Blue expects his utility company to connect another 15 data centers to the local power grid this year. 

He said, "This growth has accelerated in orders of magnitude, driven by one, the number of data centers requesting to be connected to our system, two, the size of each facility, and three, the acceleration of each facility's ramp scheduled to reach full capacity." 

He provided some context about rising power demand, pointing out:

"A single data center typically had a demand of 30 megawatts or greater. However, we're now receiving individual requests for demand of 60 to 90 megawatts or greater, and it hasn't stopped there. We get regular requests to support larger data center campuses that include multiple buildings and require total capacity ranging from 300 megawatts to as many as several gigawatts." 

Blue told analysts that Loudoun County is home to the "largest data center market in the world, and we have had an opportunity to work with our data center customers for 15 or more years."

He said the electrification of the economy, in combination with data centers, will only mean "substantial load growth driven by electrification in data centers for the foreseeable future." 

With substantial load growth coming down the pipe, the local media outlet The Frederick News-Post reported earlier this year that billions of dollars in "regional power grid upgrades" are being proposed to "increase data center power demands in Northern Virginia." 

Recently, media outlet LoudounNow reported that "hunger for energy continues to grow, especially in the data center industry with new large-scale projects adding hundreds of megawatts of demand." The paper said that this has led government officials to propose "small modular reactors."

Putting this all together plays into our latest investing theme, 'powering up America' and the upgrade of the nation's grid for AI data centers, electrification of the economy, and reshoring of manufacturing. We titled the notes "The Next AI Trade" and "Everyone Is Piling Into The Next AI Trade." Nuclear will be a big part of power generation as it's the only clean and reliable source for data centers, as Blackrock's Larry Fink pointed out last week. 

https://www.zerohedge.com/commodities/data-centers-hiding-spy-country-northern-virginia-will-need-reactors-worth-power

Governments Cause Inflation And Hurt Bond Investors

 by Daniel Lacalle,

The Fed’s preferred inflation measure rose 2.8% in March from a year ago. This is the core personal consumption expenditures price index, excluding food and energy, which should be less volatile than the consumer price index and a better indicator of the real process of disinflation.

This figure is not only concerning, considering the propaganda that repeats that the fight against inflation is nearing its conclusion, but it becomes even more so when we observe the upward trend over the last three and six months. Inflation has accelerated on a quarterly and half-year basis.

As E.J. Anthony, PhD economist, points out, “there was never any indication we were heading to the 2.0% inflation target, let alone the pre-pandemic 1.8% average; we’ve arrived at 3%+ with no indication we’re going significantly lower anytime soon, not with the current levels of Treasury borrowing and Fed allowing money supply growth.”

We need to understand why inflation is not falling as promised and announced.

There is no such thing as cost-push inflation

Fiscal policy has been reckless, and enormous deficit spending is fueling inflationary pressures through unnecessary government consumption of newly created currency.

Government spending is printing new units of currency and inflation is caused by issuing more than what the private sector demands, thus making the purchasing power of money decline.

There is no such thing as cost-push inflation, greedflation, or commodity inflation.

None of those factors can make aggregate prices rise, consolidate, and continue increasing on an annualized level.

Furthermore, if cost-push or supply chain disruptions were the cause of inflation, we would have deflation today, not rising aggregate prices every month.

Governments created the inflation burst of 2021 and have not only ignored fiscal responsibility but, in the case of the United States, maintained a completely unhealthy and unrequired budget deficit

Governments are destroying the purchasing power of money and perpetuating inflation. They created the inflation burst of 2021 and have not only ignored fiscal responsibility but, in the case of the United States, maintained a completely unhealthy and unrequired budget deficit.

“An upsurge in money growth preceded the inflation flare-up, and countries with stronger money growth saw markedly higher inflation,” concluded Claudio Borio in a scholar paper in 2023 (“Does money growth help explain the recent inflation surge?”, BIS Bulletin No. 67, January 26, 2023).

Doctors Juan Castañeda and Tim Congdon already warned as early as June 2020 that “the policy reaction to the COVID-19 pandemic will increase budget deficits massively in the world’s leading countries. The deficits will largely be monetized, with heavy state borrowing from both national central banks and commercial banks. The monetization of budget deficits, combined with official support for emergency bank lending to cash-strained corporates, is leading to extremely high growth rates of the quantity of money,” and these “will instigate an inflationary boom” (Inflation: The Next Threat? Institute of Economic Affairs, Briefing 7, June 2020).

Inflation is a policy

Inflation is not a coincidence or a fatality; it is a policy. Governments tend to announce large-scale spending programs to combat inflation.

These policies accelerate money velocity in a recovery, particularly after a shutdown like the one of 2020, as well as the quantity of money in the system.

Thus, inflation rises rapidly. The only way to contain the inflation burst is to cut spending and reduce the quantity and growth of money. However, although central banks have announced so-called restrictive policies, reality has shown the opposite.

The quantity of money in the system has not been reduced. Money supply measured as M2 has declined, and the balance sheet of the Federal Reserve has diminished, but these forces have been entirely offset by net liquidity and money market funds.

As government spending and deficit have not fallen at all, but rather the opposite, the economy has been flooded with the post-waves of the first money growth impact (2020), its market and net liquidity effect, and rising public expenditure with annual deficits close to $2 trillion.

The quantity of money has not been reduced

The Federal Reserve has increased rates, but that only helps moderate the growth of money, not eliminate inflationary pressures.

Furthermore, as markets immediately discounted large rate cuts in 2024, the real effect on money growth has been just to postpone the inevitable future monetization of such enormous deficits. It has become a Call option on a forthcoming new quantitative easing program.

We cannot forget that the quantity of money has not been reduced due to another relevant factor.

The Federal Reserve has multiplied its support for the troubled banking sector via the discount window, which offsets the modest reduction in the Fed balance sheet.

Instead of attacking inflation, the so-called “Inflation Reduction Act” has perpetuated the destruction of the value of the currency issued

By purchasing the sovereign bonds in the banks’ balance sheets at par despite the collapse in price, the Fed was inadvertently printing new money and sabotaging its own restrictive measures.

The misguided Keynesian policies implemented by the US government have cancelled out the Federal Reserve’s balance sheet reduction and rate hike efforts.

The Treasury injected more than $2 trillion per annum in liquidity, creating new money, counteracting the net $1.6 trillion that the Fed retired in three years from its balance sheet.

Therefore, the impact on the purchasing power of the currency through inflation has been negative. Instead of attacking inflation, the so-called “Inflation Reduction Act” has perpetuated the destruction of the value of the currency issued.

The impact on markets

The impact on markets has been phenomenal. The yen, once a stable currency perceived as a haven for investors, has fallen to a 35-year low versus the US dollar.

The Bloomberg index of globally expanded major currencies and the emerging markets indicator have both fallen.

The result of the 2020–2024 “free money” wave was a very expensive destruction of real wages and deposit savings.

Furthermore, bonds have been obliterated and the latest data shows that the aggregate US and euro area bond indices have not recovered from the past years’ slump, and even going back to 2020, the indices are showing negative returns.

Only the high yield index has shown a positive performance in the past four years, albeit a meager 4.5%.

Governments are destroying the currency that they issue in all possible ways. Through persistent inflation, making wage earners and middle-class deposit savers poorer, with rising taxes to try to reduce a budget deficit that was bloated by unnecessary spending in a recovery, and through the destruction of the safest asset, bonds, that have become a bad investment for the most conservative investors, pension funds.

The only way in which inflation will be reduced will be if the Federal Reserve abandons its decision to cut rates and starts to take measures that drain net liquidity.

Without the support of the Treasury, this is impossible because it floods the market with new money even if monetary policy is restrictive and investors simply discounts that all those newly issued currency units will be monetized somehow in the future.

It does not matter if Powell promises restraint when Yellen pushes excess. The most conservative bondholders will only start to see positive returns when the Treasury stops destroying the currency’s value. It does not seem likely anytime soon.

https://www.zerohedge.com/personal-finance/governments-cause-inflation-and-hurt-bond-investors

Select Medical results, outlook

 

  • Revenue: Increased by 7% compared to Q1 of the previous year.

  • Adjusted EBITDA: Grew 22% to $261.9 million from $214.1 million in the prior year.

  • Consolidated Adjusted EBITDA Margin: Improved to 14.6% from 12.9% in the prior year.

  • Critical Illness Recovery Hospital Division Revenue: Increased by 10%.

  • Critical Illness Recovery Hospital Division Adjusted EBITDA: Increased by 51%.

  • Inpatient Rehabilitation Hospital Division Revenue: Increased by 15%.

  • Inpatient Rehabilitation Hospital Division Adjusted EBITDA: Increased by 30%.

  • Concentra Net Revenues: Increased by 2%.

  • Concentra Adjusted EBITDA: Increased by 3%.

  • Outpatient Rehab Division Revenue: Increased by 2%.

  • Earnings Per Fully Diluted Share: Were $0.75, up from $0.56 in the same quarter prior year.

  • Adjusted Earnings Per Fully Diluted Share: Were $0.77, excluding Concentra separation transaction costs.

  • Dividend: A cash dividend of $0.125 payable on May 30, 2024.

  • Debt: Stood at $3.8 billion at the end of the quarter.

  • 2024 Revenue Outlook: Expected to be in the range of $6.9 billion to $7.1 billion.

  • 2024 Adjusted EBITDA Outlook: Projected to be between $845 million and $885 million.

  • 2024 Fully Diluted EPS Outlook: Anticipated to be between $1.95 and $2.19.

  • 2024 Adjusted EPS Outlook: Forecasted to be between $1.96 and $2.20

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

  • Select Medical Holdings Corp reported a strong start to 2024 with a 22% growth in adjusted EBITDA and a 7% increase in revenue compared to Q1 of the previous year.

  • The critical illness recovery hospital division exceeded expectations with a 51% increase in adjusted EBITDA and a 10% increase in revenue.

  • Significant reductions in salary, wages, and benefits to revenue ratio by 6%, with nurse agency utilization decreasing by 20% and agency rates decreasing by 7%.

  • Announced several new hospital openings and expansions, including partnerships with Rush University System, UF Health Jacksonville, Cleveland Clinic, and UPMC, enhancing future growth prospects.

  • Successful management of labor costs, particularly in the critical illness recovery hospital division, where SW&B as a percentage of revenue ratio improved significantly from 56.2% in Q1 of the prior year to 52.9%.