FILE- In this Feb. 5, 2018, file photo a Boeing 737 MAX 7, the newest version of Boeing's fastest-selling airplane, is displayed during a debut for employees and media of the new jet in Renton, Wash. The Boeing Company reports earnings Wednesday, Jan. 30, 2019. (AP Photo/Elaine Thompson, File)

FAA gives Boeing 90 days to develop plan to fix quality, safety issues

The agency’s ultimatum comes a day after a meeting with CEO Dave Calhoun and other top Boeing officials in Washington, D.C.

By Julie Johnsson / Bloomberg

U.S. regulators issued an ultimatum to Boeing on Wednesday in the wake of a near-catastrophic accident last month, giving the U.S. plane manufacturer 90 days to devise a plan to fix what it called “systemic” quality-control issues.

“Boeing must commit to real and profound improvements,” Federal Aviation Administration Administrator Mike Whitaker said in a statement a day after an extensive meeting with Boeing Chief Executive Officer Dave Calhoun. “Making foundational change will require a sustained effort from Boeing’s leadership, and we are going to hold them accountable every step of the way, with mutually understood milestones and expectations.”

The deadline follows a blunt assessment this week of shortfalls in Boeing’s safety culture from a panel of experts who issued their report after a yearlong study. The report, commissioned by Congress in late 2022, found that steps the planemaker had taken to bolster safety following two 737 MAX crashes weren’t working as intended and cautioned of a “disconnect” between senior executives and other workers.

In his meeting with Calhoun and top Boeing safety executives, Whitaker said the plan must incorporate results from the safety-culture report along with the forthcoming results of an FAA production-line audit. Boeing must also evolve its Safety Management System program, established in 2019 in response to the crashes, and integrate this with a quality management system that applies the same level of oversight to suppliers.

“Boeing must take a fresh look at every aspect of their quality-control process and ensure that safety is the company’s guiding principle,” Whitaker said.

While Whitaker chose strong words to fault Boeing, he didn’t resort to some of the harsher measures at his disposal, such as halting 737 MAX deliveries outright. That gave investors some reason for optimism, sending shares up as much as 3.2% in U.S. trading.

The outcome of Calhoun’s meeting with agency officials “could have been worse, the FAA could have imposed a plan,” said George Ferguson, an analyst with Bloomberg Intelligence.

Boeing has a “clear picture of what needs to be done,” Calhoun said in an emailed statement, citing the employee feedback gained through quality stand-downs in its factories, findings from the unfinished FAA audit and the expert review panel report.

“Transparency prevailed in all of these discussions,” Calhoun said. “Boeing will develop the comprehensive action plan with measurable criteria that demonstrates the profound change that Administrator Whitaker and the FAA demand. Our Boeing leadership team is totally committed to meeting this challenge.”

Factory presence

Boeing has faced heightened scrutiny from regulators, lawmakers and customers after a fuselage panel covering an unused door flew off while an Alaska Airlines 737 MAX was airborne on Jan. 5. Investigators later determined the jet was delivered without four bolts needed to lock the door plug in place.

In recent weeks, Whitaker has visited Boeing’s 737 factory in Renton, Washington, while Calhoun has made multiple public apologies. The FAA administrator has already taken the highly unusual step of capping output of the Boeing narrowbody until he’s satisfied Boeing has full control over the quality of work in its factories and those of its suppliers.

The U.S. regulator has teams of inspectors auditing work at Boeing and suppliers such as Spirit AeroSystems Holdings Inc., which builds most of the 737 airframe in Wichita, Kansas. Work should wrap up on the review of the plane maker’s production and manufacturing systems in the coming weeks, the FAA said. An investigation of Boeing’s “alleged noncompliance” is also under way.

Boeing has stepped up inspections since the Alaska Airlines near-miss, while adding new protocols to document when a door plug is removed within its factories. The plane maker has also deployed more employees to Spirit and added inspections of the work done there before the 737 fuselages are shipped by rail to Seattle.

The plane maker has also shaken up the executive ranks of its commercial division, placing Katie Ringgold in charge of the 737 program, while promoting Elizabeth Lund to a new post as senior vice president of quality that also gives her oversight of companywide initiatives.

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