Boeing Hit by Damning FAA Report Faulting Safety Culture (2)

US regulators issued a scathing assessment of Boeing Co.’s safety culture, putting further pressure on the company as it contends with the fallout from a near-catastrophic accident at the start of the year.

The planemaker was faulted for ineffective procedures and a breakdown in communications between senior management and other members of staff, a panel of experts convened by the Federal Aviation Administration said in a report released Monday. Constant changes to complex procedures and trainings led to confusion, while other shortcomings hindered the average employee’s understanding of their role in how Boeing manages safety, according to the report, which was mandated by US lawmakers.

“I really hope this is a wake-up call to the Boeing Company,” said Rich Plunkett, a member of the expert review panel and director of strategic development for the union that represents Boeing’s engineers.

WATCH: The FAA slams safety at Boeing.

Source: Bloomberg

The report comes a day before Boeing Chief Executive Officer Dave Calhoun is set to meet with the head of the FAA, according to people familiar with the matter, heightening scrutiny following a Jan. 5 incident in which a panel covering an unused door flew off during an Alaska Airlines flight. The executive has made multiple public apologies since then in an effort to quell criticism from regulators, lawmakers and customers.

“We will carefully review the panel’s assessment and learn from their findings, as we continue our comprehensive efforts to improve our safety and quality programs,” Boeing said in a statement.

The 50-page report highlights the work still to be done at Boeing despite efforts to overhaul its culture and bolster safety practices after two fatal 737 Max crashes in 2018 and 2019 killed 346 people. The company has created a new chief aerospace safety officer position and adopted a more systematic approach to addressing potential risks known as a safety management system, among other actions.

Yet the findings underscore how Boeing is still struggling with a more fundamental concern: ensuring that bad news from its factory floors reaches executives on the other side of the country.

In a statement, the FAA said it will immediately begin a review of the report and “determine next steps regarding the recommendations as appropriate.”

Distrust, Retaliation

The panel found that management oversight of employees responsible for investigative duties could “potentially compromise” safety and lead to retaliation. Surveys showed that many Boeing employees didn’t know how to flag potential safety issues or didn’t trust the “Speak Up” program the company put in place following a 2019 grounding of the 737 Max aircraft prompted by two fatal crashes.

“Employee interviews revealed distrust in the anonymity of the Speak Up program, which questions the effectiveness of this reporting program,” the report found. “Ultimately, employees prefer to report safety issues to their managers.”

In its work, the panel requested information from Boeing that demonstrated its commitment to safety. The materials it received “did not provide objective evidence of a foundational commitment to safety that matched Boeing’s descriptions.”

Work on the safety culture report began in March 2023. It was required by Congress in the 2020 Aircraft Certification, Safety & Accountability Act, directing the FAA to convene experts to assess the practice of deputizing company employees to act as federal inspectors.

That process was put under a microscope after the grounding of the 737 Max family in 2019 following the second fatal crash on the model. Some of the key designs linked to the crashes were approved by Boeing employees acting on behalf of US regulators.

Similar issues with Boeing’s safety culture have arisen repeatedly in recent years. Questions were raised after the grounding of the 737 Max in 2019 following a pair of crashes, and with the manufacture of the larger 787 Dreamliner.

The panel identified 27 findings and 53 associated recommendations, based on more than 250 interviews and more than 4,000 pages of Boeing documents. It called on Boeing to review its recommendations within six months and develop a plan to address them, with specific implementation dates shared with the FAA.

“What do I hope comes out of this? That Boeing stops attacking its employees,” Plunkett, of the Society of Professional Engineering Employees in Aerospace, said in an interview. “That’s your source of excellence. Embrace them, including those represented by unions. Quit fighting them for the sake of profits.”

Alaska Air Accident

The January accident on a 737 Max 9 capped a string of other quality lapses at Boeing and key supplier Spirit AeroSystems Holdings Inc. over the past year. In response, the FAA placed additional inspectors at Boeing’s factories to oversee new planes as they’re built and launched audits at both companies.

Four bolts meant to hold the so-called door plug in place apparently weren’t installed at the factory, according to a preliminary report by the National Transportation Safety Board.

FAA Administrator Mike Whitaker has said that the agency may broaden its review if problems are found elsewhere. He also told US lawmakers that agency personnel may maintain a larger presence at Boeing’s plants over the longer term. He has said the expert panel’s findings would inform any additional steps by the agency to sharpen its oversight of the planemaker.

Calhoun is set to meet Tuesday with Whitaker in Washington, DC, according to people familiar with the matter who asked not to be identified. The FAA chief intends to discuss Boeing’s quality control system, compliance with manufacturing requirements and expansion of its safety management systems, the agency said after Whitaker visited Seattle earlier this month. Such face-to-face interaction underscores the heightened scrutiny on Boeing and its main regulator.

A separate FAA investigation is underway to determine whether Boeing failed to ensure that planes leaving its factory were built in accordance with design and safety standards. The agency has also blocked the company from increasing production rates of its cash-cow jetliner above current levels until it’s satisfied Boeing has quality under control.

Calhoun has slowed factory output, shaken up management and withheld financial guidance for this year as he works to stabilize Boeing’s plants.

Boeing stock was little changed at 3:13 p.m. in New York. Shares of the US planemaker have declined 23% so far in 2024, the worst performance among members of the Dow Jones Industrial Average.

(Updates with comments from review panelist and FAA, details of Boeing’s planned meeting with FAA from third paragraph)

To contact the reporters on this story:
Ryan Beene in New York at rbeene@bloomberg.net;
Julie Johnsson in Chicago at jjohnsson@bloomberg.net;
Alan Levin in Washington at alevin24@bloomberg.net

To contact the editors responsible for this story:
Chester Dawson at cdawson54@bloomberg.net

Anthony Palazzo, Richard Clough

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