Boeing, a globally renowned aircraft manufacturer, has received negative news!
The Federal Aviation Administration of the United States has issued a statement stating that Boeing and its airframe suppliers are bound to have "non-compliance" in the quality control of 737 MAX aircraft manufacturing. The statement points out that Boeing has non-compliance issues in manufacturing process control, component transportation and storage, and product control.
Boeing is one of the world's largest civil and military aircraft manufacturers, headquartered in Washington D.C., with over 170000 employees in the United States and over 65 countries and regions worldwide. According to recently disclosed financial reports, Boeing's revenue for the full year of 2023 was $77.794 billion, with 528 civilian aircraft delivered, an increase of 17% and 10% year-on-year, respectively. The net loss for the whole year exceeded 2.2 billion US dollars. However, the above financial report only includes data as of December 31, 2023, and cannot show the serious negative impact of Boeing's multiple accidents since January this year.
In the secondary market, since the beginning of this year, Boeing's stock price has fallen by 23%, with the latest market value of $122.4 billion, while the Dow Jones Industrial Average rose by 3.45% and the S&P 500 Index rose by 7.57% during the same period.
Boeing 737 MAX quality control non-compliance
On March 4th local time, the Federal Aviation Administration of the United States issued a statement on its official website stating that Boeing and its airframe supplier, Airborne Systems, Inc. (referred to as "Airborne"), have some "non-compliance" in the quality control of the 737 MAX aircraft manufacturing.
The Federal Aviation Administration of the United States conducted a 6-week audit of Boeing and Sentinel, and found "multiple situations" involving these two companies "possibly not complying with some manufacturing quality control requirements.". Among them, Boeing has "non-compliance" in manufacturing process control, component transportation and storage, and product control.
The Federal Aviation Administration of the United States has sent audit results to Boeing and Mobil. The Federal Aviation Administration of the United States has stated that it will thoroughly review all corrective measures taken by Boeing to determine if they fully comply with the Federal Aviation Administration's investigation results. Given that the relevant investigation is still ongoing, the Federal Aviation Administration has not disclosed the specific audit results or the corrective measures that the two companies mentioned above should take.
Boeing responded by stating that they have a clear understanding of what needs to be done. Seibu Ruize stated that it is in communication with Boeing and the Federal Aviation Administration of the United States on appropriate corrective measures.
It is worth noting that in order to hold Boeing accountable for its production quality issues, the Federal Aviation Administration of the United States has stopped expanding production of the Boeing 737 MAX and is exploring the use of third-party independent quality systems for review. It will continue to increase its on-site presence at Boeing's factories in Washington, D.C., Renton, and inevitably Rui's factories in Wichita, Kansas.
The trigger for the above incident was the emergency hatch detachment incident that occurred on January 5th on an Alaska Airlines Boeing 737 MAX 9 aircraft in mid air. The investigation found that four bolts that were supposed to fix the door plug in place were missing. After the incident, the Federal Aviation Administration required all Boeing 737 MAX 9 aircraft operated by or within the United States to be grounded for several weeks for safety checks.
In 2018 and 2019, Lion Air Indonesia and Ethiopian Airlines experienced air crashes on their flights, resulting in a total of 346 deaths. The crashed planes were both Boeing 737 MAX 8 aircraft. The Boeing 737 MAX series aircraft was subsequently grounded in multiple countries and regions around the world for nearly two years. Multiple safety accidents have exposed many problems of Boeing, highlighting deep-seated issues such as corporate governance failure, regulatory oversight, and the backlash of narrow industrial policies in the United States, becoming a typical case of the decline and decline of the US manufacturing industry.
The Federal Aviation Administration of the United States recently released a report stating that Boeing's efforts to improve safety culture have not met expected goals after two 737MAX crashes, and its safety culture still has shortcomings. The report found a disconnect between Boeing's senior management and other employees. In addition, the company's approach to managing safety culture is sometimes "insufficient and confusing". The Federal Aviation Administration of the United States has stated that appropriate action will be taken based on the report's recommendations. "We will continue to demand that Boeing comply with the highest safety standards and will strive to ensure that the company fully implements these recommendations."
Action plan needs to be developed within 90 days
Just a few days ago, on February 28th local time, the Federal Aviation Administration of the United States requested Boeing to develop a comprehensive action plan within 90 days to address its "systemic quality control issues.".
In a statement, the Federal Aviation Administration of the United States stated that the plan must include the latest findings from the upcoming production line audit results and expert review panel reports to be released by the Federal Aviation Administration; The plan must include the steps that Boeing will take to improve its "security management system" plan; Boeing must also integrate this plan with its quality management system to ensure that equally strict control and supervision standards are applied to its suppliers, and to establish a measurable and systematic transformation in production quality control.
The Federal Aviation Administration of the United States stated that prior to issuing the aforementioned directive, authorities had held a meeting with Boeing CEO Dave Calhoun and other senior officials at the agency's Washington headquarters. Federal Aviation Administration Director Mike Whittaker stated that Boeing must be committed to true and profound improvement, and achieving fundamental change requires sustained efforts from Boeing's leadership. Whittaker said, "Boeing must re-examine all aspects of its quality control process and ensure that safety is the company's guiding principle."
Boeing CEO Dave Calhoun responded on the same day, "We are well aware of what needs to be done and will complete the task within the Federal Aviation Administration's deadline. All discussions will ensure transparency, and Boeing will develop a comprehensive action plan with measurable standards."
On February 21st local time, multiple American media reported that one month after the cabin door detachment incident, Boeing fired the person in charge of the 737 MAX project and reorganized the leadership team of the commercial aircraft department.
According to reports, Stan Deal, CEO of Boeing's Commercial Aircraft Division, stated in a notice to employees that Ed Clark, who has been working at Boeing for 18 years and is responsible for the Boeing 737 MAX project, will leave the company. The position will be replaced by Katie Ringgold, Vice President of 737 Delivery Business, who will serve as the President and General Manager of the project and Boeing's Washington Lenton factory. In addition, Boeing has also listed other management changes, including the establishment of a new Senior Vice President position responsible for quality and safety. This position is held by Elizabeth Lund, who previously served as the Director of Engineering and Operations, to oversee the quality control plan.
Ed Clark previously served as the chief mechanic and engineer for the 737 project, and was appointed as the project leader in 2021, the fifth person in four years to be responsible for the project. Stan Deal stated that the announcement of management changes is aimed at continuing to push for ensuring that every commercial aircraft delivered meets or exceeds all quality and safety requirements.