Federal regulators on Thursday released aninitial report about the United Parcel Service cargo plane crash that killed 14
people in Kentucky, leading investors to dump shares of GE Aerospace and
Boeing, which had merged with the cargo jet's maker nearly 30 years ago.
The investigation is centering on the UPS(UPS) cargo jet's left pylon, where "evidence of fatigue cracks" were
found and the engine separated. There were also areas of "overstress
failure" in other parts, the National Transportation Safety Board report
said.
The report included dramatic stills from asurveillance video from the Louisville, Ky., airport showing the left engine
separating from the wing as the plane took off, and a fireball engulfing that
side of the plane.
The cargo jet climbed but did not gethigher than about 30 feet before it crashed, the report said. The accident
happened on Nov. 4; the dead include three crew members aboard the airplane and
11 people on the ground; and 23 people on the ground were injured, the report
said.
The plane, a McDonnell Douglas MD-11F, wasmore than 30 years old. Boeing (BA) merged with McDonnell Douglas in 1997, a
deal that many still point out as the beginning of troubled times at Boeing and
the perceived start of a marked shift in the company's culture away from
engineering.
After a slew of problems in recent years,including two fatal crashes and a CEO change, Boeing has said it is
prioritizing operational quality.
It is unclear if Boeing would be on thehook for any liabilities stemming from crash and the McDonnell Douglas plane.
But investors were dumping Boeing shares all the same. And shares of GE
Aerospace (GE) also headed south, as the plane was equipped with GE CF-6 series
engines.
Boeing's stock sank 3.8% toward aseven-month low in recent afternoon trading, while GE shares reversed an
earlier intraday gain of as much as 2.1% to trade down 2.8%.
According to the report, the NTSB invitedBoeing and GE Aerospace to be part of the investigation, alongside UPS, the
Federal Aviation Administration and unions.