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Comment by SteveNuts | Hacker News Reader

I’m not knowledgeable in this area, is there any precedent or legal method for the US government unilaterally shutting down a large publicly traded conglomerate (purely as a hypothetical)?

Not that I think they’d actually do it, I’m just curious if it’s even possible.

I imagine they could bog them down with lawsuits but Boeing has a deep war chest and it would take many years.

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Yes, the US can nationalize a company. And it's happened before [1]. The current political climate means there's no appetite for any party to alienate actual or potential donors by doing something like this however. The one exception is banks where the FDIC can (and does) take over nonperforming banks all the time [2].

Think of it as eminent domain but for companies.

[1]: https://thenextsystem.org/history-of-nationalization-in-the-...

[2]: https://www.fdic.gov/resources/resolutions/bank-failures/in-...

In principle it is possible. But shutdown isn't what you want. Because that would cause job losses, collapse of supply chain and all of that horror.

You need restructuring. Replace management, take control over the direction. Keep things running while the mess is resolved. It's not going to be fast, an it's not going to look nice. But at this point there are no other options.

Not just Boeing, all of their shareholders, including institutional ones. This would essentially be an edict that the stock price is now $0, modulo liquidation plans. But I don’t think you could declare the company too rotten to operate and also sell off its operations, so enterprise value would be best case. Oh, and many of its assets in the form of planes would presumably be instantly devalued/worthless.

It’s a fun hypothetical (unless you work for Boeing), but I don’t think there’s a legal precedent or a good outcome even if it were possible.

A more practical approach would be to fine them a huge amount of money after a fair investigation and trial. Then, when the company is forced to declare bankruptcy or is on the brink of it, the US Government could buy the company out of bankruptcy, replacing all executive management and run it for a enough time to ensure that corrections have been implemented, then the Government could take the company public again and divest itself.

This would almost certainly fail legally on "taking" grounds.

It also fails politically, since Boeing is a critical US defence contractor, and the US is not going to cut off its supply of parts for military aircraft. Killing Boeing is a fantasy.

Not sure about the US but in the UK, the government can close companies down for things like not filing taxes or failing to pay them for example. So it wouldn't be outwith the realms of possibility that a company making planes that are potentially unsafe could have their doors closed!

I'm not mega pro-government intervention but there are times I'd like to think my gov has my back... this is one of them!

The federal government did take over GM somehow. https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reor...

shutting it fully down would likely be very difficult, but the FAA definitely has the authority to not certify any Boeing planes for a couple years and let Boeing go bankrupt

you’ve heard how the government certifies these things right? they allow the company to inspect and certify.

Because Bush Jr. government policy ordered them to and reduced funding for inspections.

yes. they can stop doing that (and in fact have already walked back some of that)

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