Struggling Electric Jet Startup Zunum Sues Boeing For Fraud and Misuse of Trade Secrets (theverge.com) 23
Kirkland, Washington-based aviation startup Zunum Aero filed a lawsuit this week accusing Boeing of fraud, technology theft, breach of contract, and misappropriation of trade secrets. The company, which had received millions of dollars from the venture arms of Boeing and JetBlue, said it would be ready to fly its 12-seat hybrid electric jets by 2022. Instead, it ran out of cash in 2018, forcing it to lay off nearly all of its employees and vacate its headquarters. The Verge reports: Zunum said that Boeing "colluded with other key aerospace manufacturers and funders" to sabotage its efforts to raise additional cash and tried to poach Zunum's engineers during the process. The startup claims that Boeing saw its superior technology and potential to disrupt air travel as a threat to its own dominance in the aviation world and sought to undermine it. Using its due diligence as an investor as subtext, Zunum said Boeing gained access to its business plan and proprietary technology, and "exploited" Zunum for its own benefit.
"Boeing saw an innovative venture, with a dramatically improved path to the future, and presented itself as interested in investing and partnering with Zunum," the company claims in court filings. "But instead, Boeing stole Zunum's technology and intentionally hobbled the upstart entrant in order to maintain its dominant position in commercial aviation by stifling competition." It's rare that a startup would sue one of its investors after failing to deliver on its promises. But Zunum said its setbacks weren't because of bad technology or a faulty business plan. Rather, the company claims it was sabotaged by Boeing, which misused its position as an investor to pillage its talent and patents before eventually scuttling the company's ability to continue to raise money.
Zunum also names HorizonX, Boeing's venture capital arm, and French engine supplier Safran as co-defendants. The company is seeking compensatory and punitive damages. A spokesperson for Boeing said the lawsuit was without merit and that the company would "vigorously" contest it in court.
"Boeing saw an innovative venture, with a dramatically improved path to the future, and presented itself as interested in investing and partnering with Zunum," the company claims in court filings. "But instead, Boeing stole Zunum's technology and intentionally hobbled the upstart entrant in order to maintain its dominant position in commercial aviation by stifling competition." It's rare that a startup would sue one of its investors after failing to deliver on its promises. But Zunum said its setbacks weren't because of bad technology or a faulty business plan. Rather, the company claims it was sabotaged by Boeing, which misused its position as an investor to pillage its talent and patents before eventually scuttling the company's ability to continue to raise money.
Zunum also names HorizonX, Boeing's venture capital arm, and French engine supplier Safran as co-defendants. The company is seeking compensatory and punitive damages. A spokesperson for Boeing said the lawsuit was without merit and that the company would "vigorously" contest it in court.
Part of a general problem (Score:5, Interesting)
I wasn't planning on such a lengthy post as that (Score:2)
but, yep, the tactics listed sound right up the modern Boeing's alley.
Too lazy to produce a good product when they can just use the USA government as a hammer to squash any potential competition instead.
Could be. On the other hand, we know a few things (Score:3)
That's possible. It would be a *little* weird because Boeing was an owner of Zunum. If Zunum had made money, that would have been Boeing making money. More to the point we know about several things that led directly to Zunum's failure, all related to piss-poor cash management:
While they were going around trying to raise a lot of cash they needed to survive, they were also making donations, such as to Perdue. They later came back and asked for their donation back. When you're trying to raise cash to make p
Re:Part of a general problem (Score:5, Informative)
Boeing also used similar tricks in an attempt to squash another competitor in the form of Bombardier and their C series planes (which ultimately backfired when Airbus did a deal to turn the C series into the A220 and has been doing quite well out of it and taking money from Boeing in the smaller size class)
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Ultimately backfired on Boeing, sure, but those shenanigans by Boeing did a massive amount of damage to Bombardier, and the Airbus deal was basically a "no other path to selling the C series, unless we can get a partner authorized to build and sell in the USA". It hurt us up here in Canada, and was big news. And it was clearly Boeing and the US government being in bed together to shut out a small competitor.
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Boeing at this point has a long history of playing dirty and trying to use their near monopoly power to control things.
Actually, they do not. Until they bought McD, they were VERY above board and a decent company. Since McD 'buyout', the same shits that ran McD intot he ground now control Boeing. So, it has been less than 25 years.
WIth that said, I would not trust Boeing management right now. They are just like Airbus, which had a LONG reputation for cheating at just about everything. Though lately, that is no longer needed. Boeing is making it far too easy for them.
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Never depend on your potential competitors... (Score:4, Insightful)
Being in a position where you are dependent on a potential competitor was monumentally stupid. What did they think was going to happen?
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They probably weren't looking at Boeing as a potential competitor. At the time, Boeing wasn't in the regional or small private jet markets at all, and they just make airframes, not engines, so I wouldn't be surprised if Zunum thought everything was hunky-dory when they signed the papers. I expect Zunum's real business plan was to get some funding from Boeing to establish a relationship, build a cool plane that would work well in the regional market, and have Boeing buy them out in order to get their own f
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Being in a position where you are dependent on a potential competitor was monumentally stupid.
The obvious legitimate reason for Boeing to invest would be to later acquire Zunum once the technology was proven.
People good at running a startup and getting the tech working are often not the right people to grow the company beyond that. So an acquisition could have benefited both Zunum and Boeing.
So Zunum's founders likely accepted the investment as the first step toward an exit strategy.
Unsure (Score:2)
Lookout Virgin Galactic (Score:2)
Just wait a bit more... (Score:2)
Pot, meet kettle (Score:1)
Re: Pot, meet kettle (Score:3)
MBAs at work (Score:2)