*

FAA has conducted unprecedented number of unannounced

Boeing ( BA )

audits

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Boeing ( BA ) needs 'fundamental cultural shift' putting safety

and

quality above profits -FAA

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FAA praises Boeing ( BA ) for waiting a month after strike to

restart

737 production to ensure safety

By David Shepardson

WASHINGTON, Jan 3 (Reuters) - The Federal Aviation

Administration's tougher oversight of Boeing ( BA ) will

continue indefinitely, the agency's outgoing head said on

Friday, nearly a year after a door panel missing four key bolts

flew off a new Alaska Airlines 737 MAX 9 in mid-air.

The Jan. 5, 2024 incident prompted FAA Administrator Mike

Whitaker to cap production at 38 737 MAX planes per month and

temporarily ground 170 airplanes. The incident exposed serious

safety issues at the U.S. planemaker and contributed to the

departure of its then-CEO Dave Calhoun.

"We have conducted an unprecedented number of unannounced

audits; and we conduct monthly status reviews with Boeing ( BA )

executives to monitor progress. Our enhanced oversight is here

to stay," Whitaker said in a statement ahead of the anniversary

of the incident.

Whitaker in February ordered Boeing ( BA ) to implement a safety

and quality improvement plan and previously acknowledged prior

oversight "was too hands off."

"This is not a one-year project. What's needed is a

fundamental cultural shift at Boeing ( BA ) that's oriented around

safety and quality above profits," Whitaker said Friday. "That

will require sustained effort and commitment from Boeing ( BA ), and

unwavering scrutiny on our part."

Boeing ( BA ) on Friday released an update on its safety and

quality efforts, saying it has instituted new random quality

audits and significantly reduced defects in 737 fuselage

assembly at supplier Spirit AeroSystems ( SPR ) by increasing

inspection points and implementing a customer quality approval

process.

Whitaker last month said he plans to step down early from

his five-year term on Jan. 20 when President-elect Donald Trump

takes office. Trump's nominee to head the Transportation

Department, Sean Duffy, told Reuters last month he wanted to

make sure "we have safe planes coming out of Boeing ( BA )."

The FAA announced a new audit of Boeing ( BA ) in October. Last

month, Whitaker met with new Boeing ( BA ) CEO Kelly Ortberg, and he

plans another meeting this month. Whitaker praised Boeing ( BA ) for

waiting a month before resuming 737 production following a

machinists strike.

Boeing ( BA ) agreed in July to plead guilty to fraud in the wake

of two fatal 737 MAX crashes in 2018 and 2019 and to pay a fine

of up to $487.2 million and spend $455 million to improve safety

and compliance practices over three years of court-supervised

probation as part of the deal. A judge last month rejected the

deal, faulting a diversity and inclusion provision.

Boeing ( BA ) shares fell by around 32% last year as it bounced

from one crisis to another, the worst performance among

companies in the Dow Jones Index.