The Federal Aviation Administration (FAA) is proposing a fine against Boeing for safety violations, though this doesn’t really seem like it’s terribly consequential.
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FAA wants to fine Boeing for safety violations
The FAA is proposing a fine of $3,139,319 against Boeing, for safety violations that occurred between September 2023 and February 2024. These include actions related to the January 5, 2024, door plug blowout, and interference with safety officials’ independence. The FAA utilized its maximum statutory civil penalty authority consistent with law.
As part of this, the FAA identified hundreds of quality system violations at Boeing’s 737 factory in Renton, Washington, and Boeing subcontractor Spirit AeroSystems’ 737 factory in Wichita, Kansas. Additionally, Boeing presented two unairworthy aircraft to the FAA for airworthiness certificates and failed to follow its quality system.
Furthermore, the FAA found that a non-Organization Designation Authorization (ODA) Boeing employee pressured a Boeing ODA unit member to sign off on a Boeing 737 MAX airplane so Boeing could meet its delivery schedule, even though the ODA member determined the aircraft did not comply with applicable standards. Boeing now has 30 days to respond to the FAA.
My take on the FAA’s proposed fine against Boeing
Obviously Boeing being fined and facing regulatory scrutiny yet again sounds bad, but a few thoughts…
First of all, a little over $3 million is basically nothing to Boeing. I realize it’s the maximum civil penalty that can be imposed in this situation, but that’s totally insignificant to Boeing. What’s probably more significant is the bad press this gets Boeing.
Second of all, it’s worth remembering that this involves issues from late 2023 and early 2024, which was around the time of the Alaska 737 MAX door plug blowing out. So this latest fine isn’t a reflection of issues at Boeing right now, but instead, just continued action against the company for what happened in the past.
Third of all, call me naive, but I think Boeing is finally heading in the right direction. To be clear, that’s not because I think the company suddenly has a culture of caring. Quite to the contrary, if there’s one thing we’ve learned, it’s the extent to which Boeing’s corporate culture of excellence was eroded over the decades, in favor of prioritizing short term stock price.
However, I do believe that the reason Boeing is now more focused on quality is for the same reason it wasn’t focused on quality previously — it’s all about stock price, but priorities for investors have changed.
At this point, investors want to see Boeing taking its time, focusing on quality, and not getting into any more regulatory issues. It’s not even about short term profits right now, but instead, about proving to regulators that the company can be trusted, so that it can ramp up production, and get certification on new aircraft.
Bottom line
The FAA is proposing a roughly $3.1 million fine against Boeing over hundreds of safety violations at the company in late 2023 and 2024. This includes everything from presenting unworthy aircraft to the FAA for airworthiness certificates, to pressuring inspects to sign off on new planes to meet delivery schedules. This seems warranted, but a fine of this amount is very little for Boeing.
What do you make of the FAA’s proposed fine against Boeing?
I guess Boeing is happy the fine was not more like 3.1 billion.
There are three substantive issues:
1. Boeing has problems with their process. Some are in-plant, some are in-product, and some are cultural.
2. The FAA has issued Boeing fines before and they'll issue them again.
3. Nothing has changed. The FAA has no bite, and maybe an "arf" of a bark, and Boeing made $75,000,000,000 last year. So $3,100,000 is around 1/2000th of their revenue. In case "fractions are hard" pretend you...
There are three substantive issues:
1. Boeing has problems with their process. Some are in-plant, some are in-product, and some are cultural.
2. The FAA has issued Boeing fines before and they'll issue them again.
3. Nothing has changed. The FAA has no bite, and maybe an "arf" of a bark, and Boeing made $75,000,000,000 last year. So $3,100,000 is around 1/2000th of their revenue. In case "fractions are hard" pretend you have a $200,000/yr salary... then this would be a fine of roughly $8. That's half a McBurger and fries.
Without bashing on the FAA's inability to fine higher, or Boeing management being unable to top-down put NEW people (not cronies or union bosses) in place with the POWER and ABILITY to effectuate change, there won't be change.
This is an industry-wide problem. But hey OMAAT is not my blog so I don't get to decide who gets picked on today. Safety is critical in EVERY step to prevent the "holes in the Swiss cheese" from lining up.
This is not "if it's Boeing I'm not going" or "the FAA sucks" or "Congress is feckless" as much as a general mess that has gone on for literally decades.
Ehud, having personal experience of the corruption in the Boeing camp, as a fee paying passenger for my own travel, I have every right to hold the strongest conviction, being ….
If it’s a Boeing …. I ain’t going!
How's that Starliner project going? The two astronauts said one thing to the press but I'll bet that they were glad that SpaceX came to the rescue! Another flopped multi billion dollar taxpayer funded project. Oh...Don't bring up who's in the White House because that's irrelevant, but how's the 747-8i that Boeing is supposed to be "converting" to the presidential airlift group? How's that project going?
Boeing has killed 346 people in 2 crashes because of their lack of adequate safety culture. While some might think they’ve turned a corner, I think they need to prove it.
The DOJ had a criminal case against Boeing which was supported by the families of the crash victims. The case almost settled last year, and the settlement would have required a court-appointed monitor to oversee Boeing’s safety culture improvements including the relationship with the...
Boeing has killed 346 people in 2 crashes because of their lack of adequate safety culture. While some might think they’ve turned a corner, I think they need to prove it.
The DOJ had a criminal case against Boeing which was supported by the families of the crash victims. The case almost settled last year, and the settlement would have required a court-appointed monitor to oversee Boeing’s safety culture improvements including the relationship with the FAA.
The judge in the case had some concerns regarding the selection criteria for the court-appointed monitor, so the case never settled. After Trump took office, the DOJ offered a much more favourable settlement to Boeing.
It’s a shame because the court-appointed monitor could have provided assurance to Boeing’s customers and the public that Boeing really is making the changes needed. It would have been to Boeing’s benefit because they could say to airlines wary of buying their aircraft “an independent court-appointed monitor determined that the problems we had don’t exist anymore”.
Instead, this fine looks ridiculous and makes skeptics laugh. I don’t think any of this benefits shareholder confidence at all
Add the 29 fatalities from the Chinook ZD576 serious incident in 1994. Another Boeing ‘own goal’.
There is no proof that Boeing is at fault for that crash
You are 100% wrong Justin.
The whole incident investigation fiasco was a Boeing and Royal Air Force cover up that continues to this day.
The crew was known to me, the cab was known to me and the Boeing software known to be corrupted.
I repeat …. You are 100% wrong and you cannot prove anything different.
At Boeing is being fined for things that are their fault and not for the things that aren’t (UA328, Jeju 2216, UA35, UA2477, DHL crash, AI171, etc)
Three million? Why not just charge Boeing ten bucks and call it a day?
Boeing’s CEO earns 5x more than AirBus’ CEO. What is the more successful company?
Precisely ted, paying megabucks for corporate failures is immensely unethical .
Looks like Ed and the gang didn't kick in enough moola for the "Presidential Library" fund...
Not enough, increase the fine drastically and send an executive to jail.
For many long term UK military pilots, Boeing aircraft had enjoyed a fine reputation. Then along came the Chinook HC2. From the beginning the FADEC program was suspected by many to be unreliable. Some of us refused to fly it. It took the fatal crash of Chinook ZD576 before anyone took any notice.
Similarly the Lockheed C-130 enjoyed an envious worldwide reputation amongst the military, that was until Boeing became involved in the AMP. Lately...
For many long term UK military pilots, Boeing aircraft had enjoyed a fine reputation. Then along came the Chinook HC2. From the beginning the FADEC program was suspected by many to be unreliable. Some of us refused to fly it. It took the fatal crash of Chinook ZD576 before anyone took any notice.
Similarly the Lockheed C-130 enjoyed an envious worldwide reputation amongst the military, that was until Boeing became involved in the AMP. Lately the Max fatalities has done nothing to improve a faltering company reputation.
Is anyone surprised that some of us with experience of the Boeing ‘cock-ups’ at the sharp end, have lost all faith in the administration of this company?
If my math is correct (always an open question), that's less than an hour of Boeing's 2024 revenues. A mere annoyance.
Absolutely Mark, however, the sad thing is that Boeing has lost its good name. That is not only at home but internationally too. Those responsible will be leaving with a substantial golden handshake, a pocket full of share certificates and a platinum plated pension for life.
Such are the rewards for failure!
Agreed, the Boeing name had such cachet not so long ago. Yet the fine is still far too little relative to the substantial safety issues involved, in my opinion.
Fines mean nothing. Jail a couple of board members and they’ll start to take notice.
There is a lot to be said for holding those people accountable for their corporate failures. Especially if it involves public funds, i.e. defence contracts, etc.
yes, Boeing is headed in the right direction but actions that are taken in the past still have consequences.
Boeing's cost cutting didn't even work for the stock price. Their products failed; you can't make money or boost your stock price when you have parts falling off planes.
The FAA is rebuilding its relationship with Boeing and Boeing has leadership that understands that the relationship that existed will never happen again and should have ended...
yes, Boeing is headed in the right direction but actions that are taken in the past still have consequences.
Boeing's cost cutting didn't even work for the stock price. Their products failed; you can't make money or boost your stock price when you have parts falling off planes.
The FAA is rebuilding its relationship with Boeing and Boeing has leadership that understands that the relationship that existed will never happen again and should have ended much earlier.
Get the 777X, MAX 10 and 7 certified along w/ the other non-commercial projects that Boeing has screwed and then we can talk about whether the FAA is overstepping its bounds