Today’s news focuses on flawed parts for Boeing 787s, US Senators urging legal action against Boeing executives and resumption of negotiations in the IAM strike.
Substandard Parts
Italian authorities are accusing 2 firms and 7 individuals over substandard Boeing 787 parts manufactured with non-conforming materials as a subcontractor to Leonardo, which builds a portion of the 787 structure. The indictment covers at least 4,289 non-conforming titanium components and 1,158 aluminum components, which will likely results in an extraordinary maintenance campaign for the aircraft involved.
Another quality escape is something Boeing does not need as it battles multiple issues with multiple programs and a strike crippling production. This is another blow to the beleaguered 787 programs that endured a three year certification delay, massive development cost overruns, a safety grounding, and continuing quality escapes despite 13 years of production.
Identifying quality issues before, rather than after production of aircraft is the major element that is apparently lacking in Boeing’s quality system, as those non-compliant components should have never been installed on aircraft.
Executive Responsibility?
Two US senators are not supporting the Deferred Prosecution agreement between the Department of Justice and Boeing reached after the MAX crashes and re-opened after the door plug blowout earlier this year. Elizabeth Warren and Richard Blumenthal would like to see Boeing executives to personally face responsibility for their actions and alleged false statements made during the crisis.
The Strike and Other News
Boeing and the IAM will return to the bargaining table today to resume negotiations. With both the UAW and longshoremen winning significantly higher wage increases than Boeing has offered, we would expect continued union pressure to “up the ante.” With a weak financial position, Boeing needs to settle this strike quickly, or face a potential downgrade of its debt from investment grade to junk status. In the interim, another lawmaker is supporting the union strike.
United Launch alliance, a JV between Boeing and Lockheed, successfully launched a second Vulcan rocket missions that should qualify it for national security payloads. That qualification opens a lucrative potential market for the program, which is rumored to be for sale, with interest from Sierra Space.
On the legal front, Boeing won its bid to re-open a contract accounting dispute with the government. The US had adjusted contractual cost claims using a regulation that clashes with a federal cost accounting statute, finding that the case was essentially a contract dispute and not a disallowed regulatory challenge.
Links to today’s key news items follow:
- Italian prosecutors accuse 7 people, 2 firms over flawed Boeing plane parts – CGTN
- Senators seek harsher crackdown against Boeing executives – Inc. Magazine
- Boeing and striking union negotiators to return to the table on Oct 7 – Yahoo
- The Boeing strike just got support from a top Democratic lawmaker – Quartz
- Boeing-Lockheed JV’s Vulcan rocket launches second mission – Yahoo
- Boeing wins revival of contract accounting dispute with US – Bloomberg Law