WASHINGTON, DC - JUNE 18: Boeing CEO Dave Calhoun appears before a Senate Homeland Security and ... [+]
Just in time for the deadline imposed by the Department of Justice, Boeing agreed to plead guilty to “conspiracy to defraud the United States, specifically, the lawful function of the Federal Aviation Administration Aircraft Evaluation Group” during the original certification of the 737 MAX. This would reverse Boeing’s previous plea of not guilty, which the company made during an arraignment of the case in January 2023.
The original charges arose after investigations of the Lion Air and Ethiopian Airlines crashes determined that a software fault of Boeing’s Maneuvering Characteristics Augmentation System had caused the crashes. Boeing was accused of misleading the FAA and its customers on the functions of this system.
After first charging Boeing with fraud, the DOJ reached a Deferred Prosecution Agreement in 2021 which required the company to pay $243.6 million in fines. The DOJ would now require Boeing to pay an additional $243.6 million.
As part of the first deal’s requirements, Boeing was to address its safety management system to ensure compliance with regulations and prevent any further fraudulent activities. The Alaska Airlines door plug blowout incident in January raised questions on whether the company had met these requirements.
While technical faults led to the two tragedies, what Boeing faces now is not a technical fault to be re-engineered. Rather, the company is up against a crisis of trust with its airline customers, regulators, government officials and the flying public. No plea deal can easily resolve this.
MCAS Was Fixed, But Boeing Wasn’t
Boeing 737 MAX aircraft are assembled at the Boeing Renton Factory in Renton, Washington, on June ... [+]
The MCAS issues were resolved when the FAA and other global regulators authorized the plane to return to service. Boeing argues the aircraft is safe. Given the large number of Boeing 737 MAX flights operating around the world every day, statistics support this claim.
As Boeing told CNN this March, “Every day, more than 80 airlines operate about 5,000 flights with the global fleet of 1,300 737 MAX airplanes, carrying 700,000 passengers to their destinations safely. The 737 MAX family’s in-service reliability is above 99% and consistent with other commercial airplane models.”
Fixing MCAS wasn’t a requirement of the 2021 DOJ deferred prosecution agreement because that much was done. Instead, Boeing was to fix its safety culture and rebuild trust.
A report by an expert panel that examined Boeing’s safety management system, published following the Alaska Airlines mid-exit door plug incident, shows that Boeing did not use the intervening three years productively to address systemic faults.
The COVID pandemic likely contributed to delays in its turn-around plan. Boeing had to effectively close down the shop and lost specialist staff which, like others in the aviation supply chain, the company has had difficulties replacing.
Boeing has coordinated multiple quality stand down days since the Alaska Airlines incident to instill a sense in its staff that quality issues matter. But multiple whistleblowers have alleged the company sends mixed-messages when it comes to putting quality ahead of profits.
The expert panel review also found that employees are confused by the company’s policies and procedures, including its Speak Up policy.
Boeing’s Endemic Issues Can’t Be Solved By Plea
Boeing 737 MAX aircraft are assembled at the Boeing Renton Factory in Renton, Washington, on June ... [+]
The endemic issues at Boeing that led to the recent Alaska Airlines incident require actions beyond the latest guilty plea deal. Boeing could not explain why four critical stabilizing bolts were missing from the Alaska Airlines door plug assembly. The documentation for repair work performed on the frame, when the bolts were most likely lost, is missing. The missing documentation speaks to procedural gaps in Boeing’s quality and manufacturing processes. Those gaps must be closed. While Boeing has repeatedly said it is committed to ensuring that they are, the crisis of trust has made some skeptical that it will.
Boeing production is under continued scrutiny by the FAA. That scrutiny would happened with or without a guilty plea. The company would need to resolve its systemic faults to recover the level of production it must maintain to keep its customers and win over more.
Complicating matters, Boeing has now committed itself to solving more production issues by reintegrating Spirit AeroSystems.
“Reintegrating these two companies is what's best for safety and for quality for the aerospace industry,” Boeing’s Chief Financial Officer, Brian J. West, said in a public statement.
West also said Boeing will focus on running Spirit AeroSystems, “not as a business, [but] as a factory” prioritizing “safety and quality and stability.” Accomplishing this will require time and resources, but Boeing has little choice but to get the job done.
737 MAX Crash Victims’ Families Feel Let Down
WASHINGTON, DC - JUNE 18: Clariss Moore of Toronto, Canada, holds a photograph of her daughter ... [+]
The DOJ has extended Boeing’s probation to an additional three years, during which the company must not commit “any violations of federal, state, or local criminal law” and will be supervised by an independent compliance monitor. While the DOJ had initially planned to appoint the compliance monitor based a pool of candidates vetted by Boeing, it changed this strategy after victims’ families objected. Instead, the DOJ states in the filing that the “government would select the pool of qualified candidates based on a public solicitation, to which anyone can apply, including candidates supported by the families.”
The victims’ families aren’t satisfied with what their lawyers describe as a “shameful sweetheart deal” and feel let down by the DOJ. Erin Applebaum, who represents 34 families in the Ethiopian Airlines 737 MAX crash, plans to object.
As Newsweek reported, she said, “The court should reject this deal and not allow Boeing to once again escape true accountability.”
While the plea agreement is still subject to approval by the Judge, it is unlikely that families will be satisfied with the result.
In June, 737 MAX families asked the Justice Department to fine Boeing up to $24.78 billion and to criminally prosecute the company. As Reuters reported, attorney Paul Cassel, who represents 15 families, wrote a letter to the DOJ stating, “Because Boeing’s crime is the deadliest corporate crime in U.S. history, a maximum fine of more than $24 billion is legally justified and clearly appropriate.”
U.S. Senators investigating Boeing have also said they wanted someone to be held accountable, but it seems unlikely that any Boeing executives would face charges under the terms of the latest DOJ deal.
Boeing Needs To Regain And Retain Trust
Relatives of Boeing airplane crash victims demonstrate before Boeing President and CEO Dave Calhoun ... [+]
It’s questionable whether a crippling fine or executives seeing jail time would address the challenges Boeing faces in regaining trust. The reality is, as Guillaume Faury, CEO of Airbus has pointed out, both airlines and their passengers need Boeing to get better.
“Ensuring safety is an absolute must in our industry and an absolute must for our products,” he said during the Airbus Annual Press Conference in February. Only turning Boeing’s safety management systems around will do that.
While the Alaska Airlines door plug blowout did not lead to an accident, it was a painful reminder that aviation safety requires constant vigilance. As Boeing CEO Dave Calhoun told Senators at a hearing last month:
“I believe this one thing was a very discreet miss with respect to the documentation of removal of that door plug, which caused this quality escape at our factory. It was a discrete instance of one error. We have tried to look at literally everything we do to make certain that could never happen. And that is what our own claims are about. That is what we're up to. But that's a very difficult process.”
The magnifying lens focused on Boeing will likely continue beyond this year. Boeing’s next CEO will inherit the responsibility for that difficult process.
In the mean time, safe production of aircraft must continue. During an interview with NBC News’s Lester Holt in March, FAA Administrator, Michael Whitaker, said there “are not unsafe airplanes leaving the factory.”
The priority for everyone affected by Boeing’s crisis of trust is to ensure that remains the case.
