Boeing’s latest probe deepens manufacturing crisis of confidence

Boeing Co. has been in crisis mode ever since the near-catastrophic accident on a 737 Max 9 in early January — and there’s little sign it’s catching a break anytime soon as the next investigation looms — this time involving the flagship 787 Dreamliner model.

The company disclosed on Monday that it had alerted authorities to potentially incomplete inspections on the long-haul jetliner, setting in motion an investigation by the US Federal Aviation Administration. While the latest mishaps don’t create an immediate flight safety issue, they will disrupt factory operations as Boeing conducts tests on aircraft being assembled.

Potentially the most damaging revelation was the suspicion that workers at the factory in North Charleston, South Carolina, may have falsified records to cover up their shortcuts. A review revealed that “several people” had not performed a required test during the wing attachment to the aircraft body, but recorded that work as having been completed, according to Boeing.

The latest twist risks worsening a crisis of confidence that has thrown the company into turmoil since a fuselage panel blew off a nearly new 737 Max plane mid-flight on Jan. 5. The FAA’s new probe also comes after whistleblowers told US lawmakers last month that the planemaker prioritizes production rates over safety and quality.

While Boeing has pushed back on that charge, the accusations and investigations add to a narrative that one of the most venerable US manufacturers has lost its way. 

Lost Way

The panel incident created a chain reaction at Boeing and the wider aviation industry, pushing out senior management and forcing the company to slow down production. That, in turn, means fewer planes for airlines clamoring for more jets, and a massive cash drain at Boeing, which heavily relies on 737 shipments to bolster its earnings.

Boeing shares, already among the worst performers on the Down Jones Industrial Average this year, took another hit on Monday, slumping as much as 2.8% after the announcement and extending the drop since January to 32%.

The FAA had already slammed Boeing in an earlier report for what it deemed problematic safety standards. In particular, it lambasted a disconnect between senior management and workers on the shop floor when it comes to best practices. 

Speaking Up

The regulator has stepped up oversight of the planemaker, capping 737 Max output and ordering the company to create a comprehensive plan to address quality and safety shortcomings by late May. 

One whistleblower, speaking at the Washington hearing last month, said the company doesn’t create a climate that encourages workers to speak up when something goes wrong. Instead, those who pointed out shortcomings were sidelined or reprimanded, he said.

Boeing has disputed that characterization and pointed to the latest notification as an example of employees doing the right thing. The company said it “promptly informed our regulator about what we learned and are taking swift and serious corrective action with multiple teammates.”

No airplanes have been taken out of service as a result of the incident for now, and Dreamliner production is continuing. Boeing must create a plan to address 787 planes that are already in service, the FAA said. 

The 787 Dreamliner is Boeing’s most advanced airliner, made in large parts of carbon composite sections that are more lightweight. The aircraft has been a huge hit with carriers, making it the best-selling passenger widebody of all time since entering service more than a decade ago, according to Boeing. 

The plane comes in three sizes, seating anywhere between 248 and 336 people, depending on cabin configuration.