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Boeing CEO to 'take responsibility' for company's shortcomings at Senate hearing
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Boeing CEO to 'take responsibility' for company's shortcomings at Senate hearing
Jun 18, 2024 11:26 AM

WASHINGTON, June 18 (Reuters) - Boeing ( BA ) CEO Dave

Calhoun took questions from U.S. lawmakers on Tuesday afternoon,

and acknowledged the planemaker's shortcomings after a January

mid-air emergency involving an Alaska Airlines 737 MAX 9

raised widespread alarm.

"I am here to answer the questions. I am here in the spirit

of transparency and I am here to take responsibility," Calhoun

told reporters earlier as he walked into the hearing room.

The senators are expected to question Calhoun over the

planemaker's safety culture as well as claims from a new

whistleblower employee at a hearing that kicked off at 2 p.m.

EDT (1800 GMT) before the Senate Permanent Subcommittee on

Investigations.

It is the first time Calhoun has faced lawmakers' questions

and puts the spotlight on Boeing's ( BA ) souring safety reputation and

the departing CEO who is expected to leave by year's end

following a management shakeup.

"This is a culture that continues to prioritize profits,

push limits, and disregard its workers," the panel's chair,

Senator Richard Blumenthal, said of Boeing ( BA ). "A culture

that enables retaliation against those who do not submit to the

bottom line. A culture that desperately needs to be repaired."

Blumenthal said a new whistleblower has come forward after a

hearing with a previous whistleblower in April. Blumenthal said

on Tuesday that Sam Mohawk, a current Boeing ( BA ) quality assurance

investigator at its 737 factory in Renton, Washington, recently

told the panel he had witnessed systemic disregard for

documentation and accountability of nonconforming parts.

In a report released by the committee ahead of the hearing,

Mohawk said his work handling nonconforming parts became

significantly more "complex and demanding" following the

resumption of MAX production in 2020 following two fatal crashes

involving the model.

He alleged that the number of nonconformance reports soared

by 300% compared with before the grounding and that the 737

program lost parts that were intentionally hidden from the

Federal Aviation Administration during one inspection. The

report said Mohawk filed a related claim in June with the

Occupational Safety and Health Administration.

Boeing ( BA ) said in a statement that the planemaker is reviewing

the claims it heard about on Monday. "We continuously encourage

employees to report all concerns as our priority is to ensure

the safety of our airplanes and the flying public," it said.

Boeing ( BA ) also said it has increased the size of its quality

team and "increased the number of inspections per airplane

significantly since 2019."

Calhoun will acknowledge shortcomings but seek to emphasize

the company's efforts to improve.

"Much has been said about Boeing's ( BA ) culture. We've heard

those concerns loud and clear. Our culture is far from perfect,

but we are taking action and making progress," Calhoun will say

in his written statement, which was seen by Reuters.

Blumenthal called the hearing a "moment of reckoning" for

Boeing ( BA ).

"Boeing ( BA ) needs to stop thinking about the next earnings call

and start thinking about the next generation," Blumenthal will

say on Tuesday.

Since the Jan. 5 mid-air blowout of a door plug on a 737 MAX

9 jet, scrutiny of the planemaker by regulators and airlines has

intensified.

The National Transportation Safety Board said four key bolts

were missing from the Alaska Airlines plane. The Justice

Department has opened a criminal investigation into the

incident.

Last week, Michael Whitaker, head of the FAA, said the agency

had been "too hands off" in its oversight of Boeing ( BA ) before the

Jan. 5 accident. Another senator has also launched a probe into

Boeing ( BA ).

On May 30, Boeing ( BA ) delivered a quality improvement plan to the

FAA after Whitaker gave the company 90 days to develop a

comprehensive effort to address "systemic quality-control

issues." He has barred the company from expanding production of

the MAX.

Last week, Boeing ( BA ) told the U.S. Justice Department it did not

violate a deferred prosecution agreement after two fatal crashes

of 737 MAX airplanes, a source familiar with the matter told

Reuters. The DPA had shielded the company from a criminal charge

arising from crashes in 2018 and 2019 that killed 346 people.

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