Congress Ramps Up Scrutiny of Boeing Executives, Board

Date : 10/20/2019 @ 3:56PM
Source : Dow Jones News
Stock : Boeing Co (BA)
Quote : 371.0001  3.5601 (0.97%) @ 8:48PM

Congress Ramps Up Scrutiny of Boeing Executives, Board

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By Andrew Tangel and Andy Pasztor 

U.S. lawmakers probing the 737 MAX jet crisis are ratcheting up scrutiny of Boeing Co. leaders as new details point to management pressure on engineers and pilots in its commercial-aircraft unit.

Investigators for the House Transportation and Infrastructure Committee looking into the design and certification of the 737 MAX have received details of a three-year-old internal Boeing survey showing roughly one in three employees who responded felt "potential undue pressure" from managers regarding safety-related approvals by federal regulators across an array of commercial planes. Workload and schedule were cited as important causes.

Such conflicts could become problematic, the survey found, when it came to Boeing engineers who played dual roles designing certain systems on behalf of the plane maker and then certifying the same systems as safe on behalf of the Federal Aviation Administration, as part of a decades-old agency program that effectively outsources such regulatory work to company employees.

The summary of the November 2016 survey also indicated that 15% of those who responded encountered such situations "several times" or "frequently." The survey results were provided to the committee by an individual, rather than as part of Boeing's formal process of turning over documents, and were reviewed by The Wall Street Journal.

The survey, which hasn't been reported before, wasn't specifically focused on the MAX but covered employees across a range of Boeing commercial airliner programs; it came near the end of the MAX's multiyear federal approval process. Boeing declined to comment on the survey, but a board member has said an internal review found no signs that undue pressure had compromised safety.

Boeing conducted the survey the same month a senior company pilot involved in the development of the MAX 737 messaged a colleague that Boeing's test pilots were "so damn busy, and getting pressure" from the program officials overseeing the aircraft's development that they lacked sufficient time to help sort out technical issues from the two aviators, according to a transcript of internal messages reviewed by the Journal and disclosed by Boeing to congressional investigators on Friday.

These glimpses into Boeing's internal culture provided by survey results during development of the MAX highlight conflicts that can arise from a regulatory regime that enlists company employees to act on behalf of both their employer and the regulator that oversees its products. In some cases, Boeing engineers or managers may have decision-making power on behalf of the FAA pertaining to the very same systems and components they design or build for the company. Such issues are at the heart of the escalating congressional debate around the way the MAX was approved.

Rep. Peter DeFazio of Oregon, the Democratic chairman of the House committee, indicated that at the hearing later this month he plans to ask Boeing Chief Executive Dennis Muilenburg about the company's internal culture and what he sees as a lack of accountability for two MAX crashes that together claimed 346 lives.

Boeing's directors, expected to meet on Sunday in San Antonio, recently stripped Mr. Muilenburg of his dual role as chairman. Board members intended the move to serve as a public signal that they were holding management to account as the MAX crisis drags on, people familiar with the matter said.

"That's not exactly major accountability, and it probably goes deeper into the organization," said Mr. DeFazio in an interview, adding that he was also dissatisfied with the board's oversight, which he described as "pretty lame."

"Even if you grant that the board thought that the original crash was pilot error and bad maintenance," he added, "certainly they should have stepped it way up after the second crash, and I haven't seen that."

The company didn't respond to a request for comment about Mr. DeFazio's criticism.

The House hearing, and another one the Senate Commerce Committee is expected to hold, come weeks after a pair of official reports, from U.S. air-crash investigators and a group of international aviation regulators, faulting Boeing for how it designed, tested and certified a MAX flight-control system, called MCAS, that authorities have said led to the crashes in Indonesia and Ethiopia.

No one at Boeing has been fired or removed from their position because of their role in the MAX crisis, people familiar with the matter said. While Dave Calhoun, a top executive at the New York private-equity firm Blackstone Group Inc., took over the chairmanship from Mr. Muilenburg, Mr. Muilenberg retained his CEO position and is still a board director, and Mr. Calhoun has said the board has full confidence in him as CEO. Other senior executives at Boeing remain in place. Kevin McAllister is chief of the company's airplane division, and Greg Hyslop remains chief engineer.

The Boeing board's recent move to restructure how the company handles engineering, safety and certification matters, according to Mr. DeFazio, was a tacit acknowledgment that production pressures have threatened Boeing's safety culture.

The reshuffling, which the board recommended after its own review, will centralize control of engineering and safety matters, giving more power to the company's Chicago-based CEO and chief engineer. While the aim is to reduce the influence of business concerns such as costs and production schedules in engineering decisions, the review didn't uncover signs that undue pressure or other lapses compromised safety of the MAX or other aircraft Boeing produces, according to Edmund Giambastiani Jr., a retired U.S. Navy admiral who sits on the company's board and oversaw the review. Adm. Giambastiani called it an "opportunity to improve the system."

The 2016 survey nonetheless showed that 29% of the more than 500 employees who answered it by late November of that year were "concerned about consequences if I report potential undue pressure."

The material laying out the survey results mentioned that "conflict can occur" when employees "are asked to develop and then approve" the same technical proposal.

The presentation of the results, which was apparently prepared for all project administrators and authorized FAA representatives across Boeing commercial-aircraft programs, also said that more than 80% of respondents to the survey expressed confidence that procedures were in place to address concerns about excessive pressure. The document also noted that the FAA separately had interviewed dozens of authorized representatives, and found that the "process for reporting undue pressure [was] well understood."

Boeing declined to comment on whether Mr. Muilenburg and the board were considering personnel changes.

"Boeing's leadership team is committed to our enduring values of safety, quality, and integrity as they implement the board's recommendations and additional actions to strengthen and elevate safety," a Boeing spokesman said, adding they are working to safely return the 737 MAX to service.

The House committee has been delving into documents it has collected from Boeing and the government and whether the plane maker had made misleading statements to the FAA before it approved the model for commercial service in March 2017, according to people familiar with the probe. The Boeing spokesman said the company is fully cooperating with all external inquiries and reviews.

Disclosures by Mr. DeFazio's committee on Friday of Boeing's internal messages between the senior Boeing pilot and his colleague have been ramping up criticism of Boeing on Capitol Hill.

The messages between Mark Forkner, then chief technical pilot for the MAX tasked with winning FAA approval for the jet's manuals and training, and a colleague in November 2016, suggest that Mr. Forkner believed he unintentionally misled regulators about certain aspects of a flight-control system.

Apparently referring to how engineers had altered the system, later implicated in both MAX crashes, to work in more typical flight conditions than it was originally designed for, Mr. Forkner said: "So I basically lied to the regulators (unknowingly)."

Months after sending that message, Mr. Forkner portrayed it differently. In a January 2017 email to an FAA official, he argued that the system known as MCAS should be taken out of manuals because it activates "way outside the normal operating envelope," and therefore cockpit crews would practically never experience it. The email was later turned over to Mr. DeFazio's committee and reviewed by The Journal.

Mr. Forkner's attorney, David Gerger, didn't respond to a request for comment over the weekend about the January 2017 email. On Friday, Mr. Gerger said the instant messages showed his client wasn't lying but was instead referring to a malfunctioning simulator.

U.S. Sen. Richard Blumenthal (D, Conn.) said he wanted to question Mr. Muilenburg and Boeing's board members about Mr. Forkner's exchange. "They need to be held accountable for this possible deception," Mr. Blumenthal said in an interview.

--Rachel Louise Ensign and Suzanne Vranica contributed to this article.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Andy Pasztor at andy.pasztor@wsj.com

 

(END) Dow Jones Newswires

October 20, 2019 11:41 ET (15:41 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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