Fasten your seat belts folks, but please don’t power down your electronic devices if you are prepared to learn that Boeing’s troubles are far more serious than just its controversial 737 MAX airliners. Only those who believe in the tooth fairy can have faith the U.S. government is committed to ensuring the safety of the flying public and will hold Boeing and its management accountable for years of extensive wrongdoing.
The mainstream media is deceiving the public that the near catastrophic Alaska Airlines incident where an emergency door over of a 737 MAX 9 aircraft broke off at 16,000 feet was simply an unfortunate incident caused by the failure of some workers to secure the part to the fuselage. Inspect all the emergency door panels of the 737 MAX 9 aircraft and voila! — problem solved. The FAA promptly blesses the 737 MAX 9’s airworthiness and Alaska and United can resume flying the aircraft they badly need to restore their schedules and generate the requisite profits needed to enrich their managements and shareholders.
There are other issues with the 737 MAX 9 the public should be aware of, which I will address.
More alarmingly, Boeing’s controversial MAX airplanes, which were Band-Aid engineering designs intended to save money, aren’t Boeing’s only troubled aircraft. Boeing also manufactures military aircraft, including the KC-A6 Pegasus, an aerial refueling and strategic military transport plane, which is a modified 767 commercial jet airliner with very sophisticated technology and circuitry. Pegasus has already cost Boeing some $7 billion in losses, and not surprisingly for a company overseen by an accountant from the private equity world, is fraught with serious safety issues.
As reported by Breaking Defense, a military trade publication, the Pegasus currently has six category 1 deficiencies, the Air Forces’ technical term for problems that could cause loss of an aircraft, injury, or death. Boeing won the Pegasus contract with a low-ball bid, and losses are expected to mount because the company agreed to a fixed contract.
Boeing, of course, isn’t alone in manufacturing problem-plagued weapons systems. Another company is naval shipbuilder Huntington Ingalls. As reported by Defense News, an unclassified report sent to Congress three years ago revealed that Navy inspectors found serious technical issues across all three U.S. Navy ship classes built by that company, including “starred deficiencies,” the Navy term for a critical flaw deficiency that significantly degrades a ship’s ability to perform missions or impacts safety.
One of the critical deficiencies on a Huntington Ingalls destroyer was its aviation systems.
A whistleblower in 2019 accused Huntington Ingalls of ignoring the Navy’s testing and certification requirements, alleging the company put sailors’ lives at risk by degrading the stealth capabilities of U.S. nuclear submarines. As reported by the Washington Post, the whistleblower, a former senior engineer, accused his former employer of assigning unqualified individuals to install an important hull coating, designed to shield the Navy’s Virginia-class nuclear submarines from sonar, and of falsifying the records to cover up their mistakes.
What links Boeing to Huntington Ingalls is the latter company’s chairman, retired U.S. Naval Admiral Kirkland Donald, who has served on the company’s board since 2016, the last 16 months as chairman. Boeing CEO Dave Calhoun tapped Donald to serve as a special advisor on his company’s safety issues. Some of the safety allegations facing Boeing will ring awfully familiar to Donald; a securities lawsuit filed last year against Boeing subcontractor Spirit AeroSystems alleged the safety auditors were pressured to falsify reports. Spirit, which was spun off from Boeing in 2005 as part of a cost savings move, manufactures the fuselages for the 737 MAX 9.
Notably, Donald has no aviation experience, and his military experience involves commanding warships, not building them. He’s hardly the person Boeing would turn to if the company was serious about aggressively investigating safety issues regarding the manufacturing of its airplanes.
I haven’t identified even one publication that’s questioned Donald’s suitability to serve as safety manufacturing consultant.
What also has emerged in a lawsuit filed by some passengers who flew the Alaska Airlines flight that lost part of its fuselage is that not all the aircraft’s oxygen masks were working when the plane lost pressurization after the emergency door cover blew off. This, too, has a familiar ring.
In November 2019, former Boeing quality control engineer John Barnett alleged to the BBC that 25 percent of the oxygen systems he tested in 2016 for the company’s 787 Dreamliner jets didn’t work correctly – and Boeing installed them regardless. Barnett, who worked at Boeing for 32 years until his retirement for health reasons, also alleged the faulty parts were deliberately fitted to planes on the production line at one Boeing factory.
The FAA said it couldn’t substantiate Barnett’s claims because the company had already taken measures to address a supplier issue. In what’s become the company’s familiar refrain, Boeing said “safety, quality and integrity are at the core” of its values”.
Calhoun, Boeing’s CEO who joined the company’s board in 2009 and reportedly play a major role in the cost cutting responsible for the company’s myriad problems, has pledged “complete transparency” in its investigation of 737 MAX safety issues — a claim he made when he became CEO three years ago – yet so far hasn’t disclosed the status of Boeing’s deferred prosecution agreement with the Justice Department that was scheduled to expire just days after the Alaska Airlines incident.
That deal resolved a criminal probe of Boeing following the 737 MAAX crashes of Lion Air Flight 610 in October 2018 and Ethiopian Airlines Flight 302 in March of 2019. The agreement required Boeing to pay a $2.5 billion penalty and admit to conspiring to defraud federal regulators. The sweetheart deal also provided immunity from prosecution if the company demonstrated it had bolstered its compliance programs.
U.S. District Judge Reed O’Connor in October 2022 issued a strong rebuke to the Justice Department and Boeing for cutting the deal without consulting the families of the 346 persons killed in the 737 MAX crashes.
“The Court finds that the tragic loss of life that resulted from the two airplane crashes was a reasonably foreseeable consequence of Boeing’s conspiracy to defraud the United States,” O’Connor wrote.
As reported by Bloomberg, John Coffee, a Columbia Law School professor, in 2022 published a paper entitled, “Nosedive: Boeing and the Corruption of the Deferred Prosecution Agreement,” arguing that prosecutors and Boeing went to great lengths to strike a lenient deal.
“DPAs are manipulated so that both the prosecution and the defendant gain goals important to them—at the cost of denying transparency to the public,” Coffee said in the paper. “In the Boeing case, the prosecution won a symbolic victory with an illusory $2.5 billion settlement.”
Boeing has made major campaign contributions to both Republicans and Democrats, including presidential aspirant Nikki Haley, who also served on the company’s board. Secretary of State Antony Blinken reportedly served as a Boeing consultant, as did Julianne Smith, America’s ambassador to NATO. Bloomberg reported that Blinken’s return from Davos last week was delayed because of a critical malfunction with his 737 aircraft. An oxygen leak previously detected couldn’t be remedied.
The Lever reported last week that in 2020, in wake of the 737 MAX crashes and Boeing’s admitted wrongdoing, CEO Dave Calhoun was paid $21 million in compensation, a $6.8 million increase from what his fired predecessor made in 2019. Calhoun has since received more than $40 million in additional compensation.
Thomas Gentile, then CEO of Boeing subcontractor Spirit AeroSystems, was paid $10 million. In total, The Lever reported that Boeing spent about $573 million on executive pay over the past decade, while Spirit paid its executives nearly $245 million.
During the same period, Boeing spent more than $40 billion on stock buybacks intended to bolster the price of its shares and distributed almost $22 billion in dividends, according to regulatory filings review by The Lever. Spirit has also spent $2.4 billion on stock buybacks. And since the Boeing subcontractor began paying dividends in 2017, Spirit has paid shareholders more than $169 million.
The Lever, a publication founded by former Bernie Sanders speechwriter David Sirota, is the only publication so far doing any critical and original reporting about Boeing’s extensive troubles and how they were years in the making. The publication landed a major scoop with its reporting on a class action lawsuit filed last May and amended last month against Spirit AeroSystems, alleging in painstaking detail various wrongdoings, including how safety auditors were pressured to falsify records.
The Lever’s reporting was spearheaded by Katya Schwenk, a Vermont native who appears to have only joined The Lever last fall after a two-year stint at the Phoenix New Times and earlier covering breaking news in Morocco. The Lever is a reader supported publication that aims to hold accountable “the people and corporations manipulating the levers of power.”
There was a time in American journalism when all credible publications aimed to achieve that goal.