3 things Boeing needs to do after Senate hearings: Analyst

The congressional spotlight is on Boeing (BA) as two separate US Senate hearings are scheduled to take closer look at Boeing's safety culture. One of the hearings will be based around Boeing quality engineer turned whistleblower, Sam Salehpour, is expected to call for worldwide grounding of Boeing's 787 Dreamliner jet due to safety concerns, adding another challenge for the aircraft manufacturer.

Seaport Research Partners Managing Director and Senior Analyst Richard Safran joins Yahoo Finance to break down what to expect from the Senate hearings over issues with Boeing and what the company should do following their conclusion.

Safran outlines three things Boeing should do: "They need to understand lessons learned, develop a good understanding of what the issues were, what went wrong, implement the changes, and hopefully the new CEO and the 90-day plan we're working on right now does that. They need to execute. After the dust settles, management needs to keep execution as top priority, and as you say, a major thing they need to do is restore the brand, restore the public trust. That includes regulators, customers, as well as the flying public, people like me, who want to get on these airplanes."

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This post was written by Nicholas Jacobino

Video transcript

- Richard, how much do you anticipate us learning today, given that executives are not going to be speaking? I know you mentioned wanting to hear more about the data piece. What are you going to be listening for, given, again, that we're not going to be hearing from executives at the top of the company today?

RICHARD SARFAN: Well, the company has responded prior to this hearing, to these whistleblower hearings. And so it felt that interesting that they felt-- that they went out and replied with two line managers on the 787 with data. So to answer your question, what I'm going to be looking for today is the evidence that's going to be-- what I think we're going to learn is what evidence there is to refute what Boeing has been saying, the quality of that evidence, and whether or not this whistleblowers claims have any substantiation to them. I think that's probably, in my view, the most important thing I think you're going to get out of the hearings today.

- Richard, I think customers would probably argue the evidence is the plane having parts fly off during flight. What do you make of that piece of things, the idea that consumers image of Boeing has already been tarnished by this, and therefore, of course that could put pressure on the stock moving forward?

RICHARD SARFAN: Well, first off, good point. Those issues with the door, of course, were on the Boeing 737 Max. The whistleblower appears to be making claims as far as I understand it on the Boeing 787 and some on the Boeing 777. So first off, just a bit of a nuance there, but a different one. But your point is well taken. Boeing needs to do three things here-- they need to understand lessons learned, develop a good understanding of what the issues were, what went wrong, implement the changes, and hopefully, the new CEO and the 90-day plan that we're working on right now does that.

They need to execute after the dust settles. Management needs to keep execution is top priority. And as you say, a major thing here that they need to do is restore the brand, restore the public trust that includes regulators, customers, as well as the flying public, people like me who want to get on these airplanes. I think that's really an important point right now, as you say, that they're going to have to make an extraordinary effort to restore the brand and the trust.

- And Richard, to that point, we've also seen this willingness from Senator Cruz who we just played a clip at him at the top of the interview included, just in terms of ramping up that oversight. What do you think just in terms of what we hear today? How today's hearing? Or do you think it at all is going to give us a better idea of how that oversight could potentially shape up? And what it could ultimately look like?

RICHARD SARFAN: I think it's pretty clear we're going to have more oversight. I don't think since the plan isn't complete, and there hasn't been a lot of time between when these incidents first cropped up that the FAA has a clear understanding of what actions it needs to take. So I'm not expecting a lot in terms of being able to answer your question today to come out of the hearing about what actually is going to be implemented. There already have been certain changes made, et cetera. But the changes that Boeing is going to make and the regulators are going to need to make, I think, are still being ironed out. And I think you're going to have to wait at least until the 90-day plan is completed, and they've had a chance to figure out how they're going to implement that.