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Amidst turbulence, RTX finds itself under U.S. authorities’ scrutiny for its handling of Pratt & Whitney engine recalls.
The aerospace and defense company disclosed that the U.S. Securities and Exchange Commission (SEC) had issued subpoenas as part of an investigation into the company’s conduct.
In its annual report, RTX admitted that microscopic contaminants had been found in the powdered metal used by Pratt & Whitney to manufacture high-pressure turbine discs for Geared Turbofan engines. This revelation led to the grounding of affected planes for engine inspections and potential repairs.
RTX revealed that it expects to spend $7 billion on engine fixes and reimbursing airlines for losses. The company also projected a profit reduction of $3.5 billion in the coming years.
According to the annual report, RTX received subpoenas on Nov. 7, 2023, and Jan. 30, 2024, with the SEC demanding access to engineering, operational, organizational, accounting, and financial documents.
The company stated that it is cooperating with the SEC in response to the investigation related to the previous year’s disclosure of engine problems and associated risks, which prompted the filing of two class-action lawsuits.
“At this time, we are unable to predict the timing or outcome of this SEC investigation,” RTX’s annual report mentioned.
