Insight Monday 10 August 2020: Boeing Pressure and ODA

News:

Last week, news broke that Boeing might be fined $1.25 million due to the company’s managers putting undue pressure on employees exercising their Designated Authority roles with the FAA at the Charleston 787 assembly facility. Those employees have a dual reporting relationship and provide the quality control inspections for the FAA to approve airplanes before they ship.

The Seattle Times reported on an FAA charging letter that indicated that four senior Boeing managers in Charleston were “pressuring,” “harassing.” and “berating the performance of” employees designated to represent the FAA and perform independent inspections. Those employees include the Vice President of 787 operations, the Senior Quality Manager, and the Director of Delivery, none of whom should have been directly involved with the Designated Authority holders.

This one again brings into focus the weaknesses in the Organizational Designation Authority process, which reared its head in the 737 MAX certification process review. In that instance, undue pressure was allegedly also a factor in the approval of the flawed systems that resulted in 346 deaths in two crashes.

Analysis

Detailed allegations included pressing an inspector “to perform a compliance inspection of an aircraft which was not ready for inspection, to ”perform inspections more quickly and to report to aircraft ready for inspection faster,” threatening to have inspectors replace and berating their performance, and waiting outside aircraft to monitor the speed with which inspectors responded to requests and the length of time their inspections took. Compounding the issue, after a highly qualified manager filed a report citing “undue pressure” the company retaliated by declining to interview the manager for promotion.

This is nothing new for Boeing. Last April, the New York Times reported on the Charleston assembly line production issues and weak oversight, and in the wake of the MAX grounding, a panel of air-safety regulators recommended that the processes at Boeing be changed to eliminate the potential for punitive actions and undue pressure.

Insight

A $1.25 million fine for Boeing is probably the equivalent of a nickel for most of us, that is, an insignificant amount that we would pay as a fine.  Boeing was earlier fined $12 million in 2015 for falsified paperwork and quality problems in both Puget Sound and Charleston – but again a sum with no real teeth for Boeing  The problems continued. The Department of Justice has been investigating the 737 MAX since last year but is still yet to bring any actions. The regulatory tiger is toothless.

The problem with regulatory actions that have no meaningful impact is that Boeing can pay the fine, give the problems lip service, and return to their normal operations as if nothing has happened. Fortunately, international regulators are now watching the certification process, and could dramatically increase certification costs should they determine that Boeing has not changed its ways.

That would mean not being able to sell aircraft in Europe or China should EASA and CAAC determine that a certification or quality process remained flawed. While US regulators are somewhat beholden to domestic politics, international regulators are not. Thus, after the FAA failure in the certification of the MAX, the nature of the game is changing, and hopefully for the better. The 346 737 MAX passengers and crew who perished deserved better, as do passengers who fly the 787.