This week, there are new revelations concerning the ongoing Boeing 737 MAX aircraft grounding crisis, scheduled to be shared today before a U.S. Congressional Review committee.

From our Supply Chain Matters lens, such revelations likely have major implications for Boeing and the manufacturer’s associated supply network partners moving forward.

 

Whistleblower Alleges 737 MAX Plagued with Production Challenges

A published report from the New York Times (Paid subscription required or complimentary metered view) disclosed:

Four months prior to the first deadly crash of Boeing’s 737 MAX, a senior manager approached an executive at the company with concerns that the plane was riddled with production problems and potentially unsafe.

The specific manager identified as Ed Pierson, retired from Boeing in 2018 out of concerns for what was occurring in the aircraft’s production processes. He is scheduled to testify at the U.S. House of Representatives Transportation Committee hearing being held today. The Times report indicates that in June 2018, Pierson emailed the head of the 737 program of his hesitancy about putting his family on a Boeing airplane. Further revealed in this published report:  Boeing 737 production line

Employees at the Renton Wash. factory where the Max is produced were overworked, exhausted and making mistakes, Mr. Pierson said in an interview. A cascade of damaged parts, missing tools and incomplete instructions was preventing planes from being built on time. Executives were pressuring workers to complete planes despite staff shortages and a chaotic factory floor.”

The report goes on to note that after Mr. Pierson’s retirement:

After the first Max crash in October 2018, he took his concerns to Boeing’s chief executive, Dennis A. Muilenburg, and the company’s board. Boeing lawyers, including its general counsel, spoke with Mr. Pierson about his complaints, according to Mr. Pierson and documents reviewed by The Times. But Mr. Pierson said the company did nothing in response.

Noted was that rather than focusing on the troubled MCAS flight control system, Mr. Pierson’s concerns were focused on production component problems, such as the angle of attack sensors, that may have contributed to the MCAS actions that resulted in the two tragic results. The report indicates that Boeing disputed to the publication, any connection between cited production problems and the tragic accidents.

The Times report further indicates that after the second fatal accident involving the aircraft, Mr. Pierson subsequently reached out to the U.S. Federal Aviation Administration (FAA), the Department of Transportation and the National Transportation Safety Board to express his concerns.

 

Alleged FAA Internal Review Identified High Risk for MAX Crashes

It what was characterized as an exclusive report, The Wall Street Journal indicated this morning (Paid subscription required) that:

U.S. regulators decided to allow the 737 MAX to keep flying after its first fatal crash last fall, despite their own analysis indicating it could become one of the most accident-prone airliners in decades without design changes.

The November 2018 internal Federal Aviation Administration analysis, released during a House committee hearing Wednesday, reveals that without agency intervention, the MAX could have averaged one fatal crash about every two or three years. That amounts to a substantially greater safety risk than either Boeing or the agency indicated publicly at the time.

What we found as considerable concern was this WSJ report’s indication that the FAA  assessed the potential for 15 projected crashes during the aircraft’s operating lifetime without modifications being made. According to the report, in 2018 at the time of the internal assessment, FAA leaders elected to permit the MAX to remain in-service with two added safeguards: “Boeing would devise, test and with the FAA’s approval install revised software for MCAS, the suspect stall-prevention system that led to the October 2018 crash in Indonesia”, and by reiterating to worldwide airline crews how they should respond to similar MCAS incidents, all until a permanent design change could be performed by Boeing. Both assumptions reported fell apart with the second tragic incident.

 

What These Developments Imply

Again, from our Supply Chain Matters lens, these two new revelations caste a considerable shadow on the 737 MAX, a shadow that was already suspect. These are two added bombshells that regulators are going to be hard pressed to ignore.

The added allegation of systemic production challenges concerning the 737 MAX that resulted in concerns among certain production workers as to the aircraft’s overall quality and air worthiness, if deemed to be pertinent to government regulators, open up a far broader looking glass. In April of this year, the Supply Chain Matters blog highlighted a similar New York Times report casting concerns on shoddy production practices involving the 787 Dreamliner’s North Charleston production facility. That report pointed to a culture that was similarly described as often valuing production speed over quality. The report noted that some employees had also filed whistleblower complaints with air safety regulators out of concern for aircraft safety. Now, with two of the manufacturer’s mainline aircraft production programs now being publicly cited for shoddy production practices, the implications are becoming ever so obvious.

Boeing will likely have to address such concerns, from the highest executive levels to the production floor, or risk further regulatory oversight along with added brand reputation damage.

This new revelation of the 2018 FAA internal report acknowledging specific design issues with the aircraft and its potential safety record, prior to the second tragic accident, will likely re-invigorate the debate as to Boeing’s overt influence with U.S. regulators as well as another hit to perceptions of the safety of this specific aircraft.

Both of these new developments stand to collectively add to the tarnished perceptions of the 737 MAX among global-wide air safety regulators and to the flying public.  The implication is likely added delay for aircraft re-certification, and the real possibility of a further temporary cutback in the aircraft’s monthly production schedule, and for more rigorous quality audits of aircraft production facilities.

Obviously, this week’s Congressional hearing, depending on outcome, has major added implications for the entire Boeing supply chain network.

 

Bob Ferrari

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