Outgoing Boeing CEO David Calhoun (BA) testified before a US Senate panel addressing safety concerns within the company and even apologizing directly to the families of victims of recent incidents involving Boeing jets.

Gabelli Funds Portfolio Manager Tony Bancroft joins Market Domination Overtime to give insight into what investors need to keep in mind in regard to Calhoun's testimony, a new whistleblower that stepped forward, and the aerospace manufacturer's search for Calhoun's successor.

Bancroft claims Boeing is committed to improving its manufacturing quality, keeping the company as a top pick moving forward:

"I think it's sort of more of a long-term story. Right now, Boeing is in the process of rebuilding the culture and working on their QA [Quality Assurance] and safety practices and it's going to take time. It's just not going to happen overnight, and the stock's probably just not going to react until we see a new CEO, this Spirit deal closed, and you start seeing production rates in the 737 increasing. But we continue to like the stock... it's a number one holding in our Gabelli Commercial Aerospace and Defense ETF (GCAD)."

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Nicholas Jacobino

Video Transcript

Well, outgoing Boeing, the outgoing the Boeing Ceo testifying in front of lawmakers earlier today about the safety culture at the company.

Boeing is the number one holding our next guests, commercial aerospace and defense ETF more on Boeing's path forward and what it means for investors were bringing in Tony Bancroft portfolio manager at the belly funds.

Tony.

It's good to see you again.

So, you know, obviously, whenever you get uh a congressional hearing like this, you get some political grandstanding, of course, but we also got new whistleblower um revelations today with regard to Boeing and about the quality of the materials that it has been using.

What's your level of concern about whether Boeing is getting back on track?

Uh Thanks Julie.

It's great to be back.

And uh and Josh, you know, I think Boeing coming to this uh meeting today, you know, Ceo Calhoun knew he was gonna take a, take a grilling shows, you know, they're committed to transparency and obviously what they have discussed with and so put out and uh which the fa is agreed upon.

Um you know, they, they have, they have a lot of, they've got a lot of work to do.

They've got a long way to go.

Um, but I think they're committed to it and, you know, I, I think it is sort of more of a long term story.

I, I think right now, you know, Boeing is in the process of, of uh sort of rebuilding the, the culture and uh working on their Q A and safety practices and, and it's gonna take time.

It's just, it's just not gonna happen overnight.

Um And uh you know, the stocks probably just not going to uh react uh until we see, uh you know, a new CEO um the, the sphere deal closed and you start seeing production rates in the 737 increasing, but we continue to like the stock.

It's our, it's a, it's a number one holding in our Gabelli commercial aerospace and defense uh GT I ETF and um I think the long term secular uh you know, uh thesis um the tailwinds for, for Boeing uh remain intact and you're gonna continue to see them improving their uh their quality, their operations and, and production rates and you're gonna probably see a year or two from now of a better, a better company.

And Tony, you mentioned, you know, a new CEO um who do you think that new Co should be Tony?

Do you, do you have, you know, names of candidates you'd like to see, take that big seat or, or at least, you know, more generally Tony, the, the kind of background experience, skill set.

You, you think that next CEO needs to have?

Yeah, I think, uh, you know, I'm sort of in line.

I, I've, I've spoken with Boeing and they sort of have what they call their wish list.

You know, someone that can essentially usher in the next, the next plane.

The 737 max won't be around forever and they're gonna need to, uh design a new aircraft that's more efficient and, you know, has worse safety features, uh you know, esg friendly, you name it.

And, and so they're gonna need someone that has the, the engineering files to do that.

Uh They're gonna need someone who can uh you know, sort of work with the, with Boeing's culture and sort of their, their employees hearts and minds uh to sort of improve uh improve that aspect of the business and, and they need someone with a technical, you know, sort of engineering operational uh background that can, you know, that, that understands production, uh supply chains for production, um uh you know, production lines and can improve the efficiency there.

And I think the logical, you know, the logical person would be someone like Pat Shanahan, you know, the CEO of Spirit AO Systems, I think when they get this deal done, um there could be an announcement that, you know, he, he takes over as CEO, former Ceo uh a former Boeing employee as co experience, engineering background has worked in government.

I think he sort of, um, you know, hits all the hits, all that we get.

Tony.

I know that you are confident in the company's sort of transparency that we have seen.

Right.

But I have to wonder, were there problems in past years that we just didn't know about and now we know about them or are there more problems now?

I, maybe that's difficult to know.

It just seems like there, there are issues here.

It's not just that they, you know, that they're being more transparent.

It's if, if we're people flying on a plane that is a Boeing seems like there are some areas of concern.

Yeah.

You know, I listen, I think Boeing is just like any other large corporation.

Um And obviously, you know, no, nobody's perfect and no corporation is perfect.

I'm sure if you went to any fortune 500 company in America and put the spotlight on in the microscope that Boeing has on them right now, you're gonna find, find issues.

And I don't think, you know, Boeing itself admittedly no different than that.

But if you will look at the big picture, the safety record that the, you know, the FAA has um has upheld for the last 15 years, not a crash related.

Um uh uh uh mi mishap that's uh you know, in turn related, you know, had a death um on an fa on an fa aircraft that you know, it's just Boeing is essentially a victim of its own success.

I mean, you know, they're 51% of the FAA fleet so they're the mass majority of, of what is flying safely every second or so, someone's flying in a Boeing aircraft.

Um, and, and I just think that, you know, Boeing is getting a lot of heat right now but the reality is, is it the safest way by far still to fly or to travel?

You know, of any, any mode of transportation?

Tony.

Good to have you on the show.

I appreciate you making time for us.

Thanks Josh.