FAA gives Boeing 90 days to develop plan to address quality issues

© Reuters. FILE PHOTO: An aerial photo shows Boeing 737 MAX airplanes parked on the tarmac at the Boeing Factory in Renton, Washington, U.S. March 21, 2019. REUTERS/Lindsey Wasson/File Photo

By David Shepardson and Valerie Insinna

WASHINGTON (Reuters) -Boeing must develop a comprehensive plan to address “systemic quality-control issues” within 90 days, the head of the U.S. Federal Aviation Administration said Wednesday, after a mid-air emergency last month sparked renewed safety concerns.

The head of the Federal Aviation Administration (FAA) demanded the plan in a statement critical of the planemaker following an all-day meeting with CEO Dave Calhoun on Tuesday.

“Boeing (NYSE:BA) must commit to real and profound improvements,” FAA Administrator Mike Whitaker said in the statement. “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.” 

Calhoun said in a statement the Boeing leadership team is “totally committed” to addressing FAA concerns.

“We have a clear picture of what needs to be done,” Calhoun said in a statement. “Boeing will develop the comprehensive action plan with measurable criteria that demonstrates the profound change that Administrator Whitaker and the FAA demand.”

Boeing has scrambled to explain and strengthen safety procedures after a door panel detached during a Jan. 5 flight on a brand new Alaska Airlines 737 MAX 9, forcing pilots to make an emergency landing while passengers were exposed to a gaping hole 16,000 feet above the ground.

Boeing’s production rate has been capped by regulators and closely scrutinized by lawmakers and customers following the Jan. 5 incident and the new statement raises fresh questions about how long the production rate halt will last.

Whitaker said Boeing’s plan must incorporate forthcoming results of the FAA production-line audit and findings from an expert review panel report released earlier this week.

That report, which had been commissioned in early 2023, was highly critical of the company’s safety management processes, saying Boeing suffered from “inadequate and confusing implementation of the components of a positive safety culture.”

Boeing last week abruptly removed Ed Clark, the head of its troubled 737 MAX program, as part of a management shakeup.

Shares were up 2.3% on Wednesday.

‘SYSTEMIC SHIFT’

The FAA said Wednesday Boeing must take steps to improve its Safety Management System (SMS) program, which it committed to in 2019 and combine it with a Quality Management System to “create a measurable, systemic shift in manufacturing quality control.”

Whitaker visited Boeing’s Renton, Washington, factory, where the 737 MAX line is produced, on February 12. Whitaker expressed concerns about some things he saw on the tour, two people briefed on the matter told Reuters.

The FAA meetings with Calhoun lasted more than seven hours, sources said, and much of it focused on a series of quality issues at the planemaker.

“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. 

The Alaska Airlines mishap is Boeing’s second major crisis in recent years, after crashes in 2018 and 2019 of MAX planes killed 346 people. That prompted a grounding of the 737 MAX for 20 months that damaged Boeing’s reputation.

The FAA panel report referenced the recent issues, saying it amplified concerns that “safety-related messages or behaviors are not being implemented across the entire Boeing population.”

Airline industry executives have expressed frustration with Boeing’s quality control. France’s Airbus, the only other major manufacturer of commercial jets, in January reported record annual jet orders and confirmed an 11% rise in 2023 deliveries, maintaining the top manufacturing spot against Boeing for a fifth year.

The FAA grounded the MAX 9 for several weeks in January and has capped Boeing’s production of the MAX while it audits the manufacturing process after a string of quality issues.

The door panel that flew off the MAX 9 appeared to be missing four key bolts, according to a preliminary report this month from the U.S. National Safety Transportation Board. The panel is a plug in place on some 737 MAX 9s instead of an additional emergency exit.

According to the report, the door plug in question was removed to repair rivet damage, but the NTSB has not found evidence the bolts were re-installed.

The disclosure angered Boeing’s airline customers. Some, including Alaska Airlines, announced they would conduct enhanced quality oversight of planes before they leave the Boeing factory.