Murray's Week In Review

A seismic shift.

What follows was written by Matt Murray, former editor-in-chief of The Wall Street Journal. It’s a new feature of News Items. It arrives in your in-box most every Friday at ~noon.

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1. In a seismic shift, The National Association of Realtors on Friday said it has agreed to scrap long-standing rules on commissions, eliminating the 6% fee seen as a "bedrock of the industry," while paying $418 million to settle lawsuits with groups of homesellers claiming antitrust violations. The settlement would upend how Americans buy and sell homes, giving them room to negotiate fees or forego agents altogether. The NAR, which has set guidelines on home sales for decades, had required most homesellers to pay a 6% commission--typically split between the buyer's agent and seller's agent--despite persistent complaints that homeowners should be able to negotiate them. Last year a Missouri jury found the NAR and two brokerages liable for $1.8 billion for conspiring to keep fees artificially high. If approved in federal court, the deal would settle countless legal claims from homeowners who say they were charged excessive fees. “This will blow up the market and would force a new business model,” says Norm Miller, a professor emeritus of real estate at the University of San Diego.

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2. The crisis at Boeing deepened, again. A six-week FAA review, launched after a door panel blew off a 737 Max 9 during an Alaska Airlines flight in January, found dozens of manufacturing supplier problems. Among them: Mechanics at supplier Spirit Aerosystems applying liquid Dawn detergent to a door seal as "a lubricant in the fit-up process," then wiping it down with a wet cheesecloth. Boeing vowed "immediate actions." (These days Boeing keeps a running log of responses to various investigations and safety concerns.) The DOJ is pursuing a criminal investigation of the Alaska Airlines flight; previously, the NTSB accused Boeing of an "absurd" lack of cooperation with its investigators. (The Times also reported that the plane on which the door panel blew out had been flagged by engineers and was due for a safety check, but the airline kept it in service an extra day.)

Boeing sneezes, the airline industry catches cold. Southwest, expecting 40% fewer deliveries than it planned, and others are cutting back schedules because of slowing production. United Airlines, a big customer and persistent critic, told Boeing to just forget about delivering new 737 Max 10s and focus on the smaller 737 Max 9, while sending more business to archrival Airbus. A whistleblower who had reported quality lapses at a Sound Carolina factory committed suicide. And Boeing planes continue to report mishaps; the most terrifying, the sudden downward plunge of a Latam flight to New Zealand on Monday, may have been a crew error but Boeing is taking no chances. A spokesman for the pilots union, who flew Boeing 707s in Operation Desert Storm, says he is on high alert on Boeing flights, noting, "It feels like the enemy is within."

Pressure already was mounting on CEO Dave Calhoun, a Jack Welch protege brought in to fix the company after Boeing's Indonesia crisis in 2018 and 2019. Boeing recently elevated a new COO, who has been seen as a possible successor. But the problems were decades in the making. Shares are down 28% this year, and at their widest gap with Airbus ever. 

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