Boeing CEO blasted by Senate panel: ‘It’s a travesty that you are still in your job’

WASHINGTON
—


Boeing
CEO
Dave
Calhoun
was
hammered
by
a
Senate
panel
on
Tuesday
over
the
company’s
safety
and
quality
lapses,
a
host
of
whistleblower
allegations
about
company
corner-cutting
and
retaliation,
and
his
own
pay
package.

Calhoun,
who
said
in
March
that
he

will
step
down
by
year’s
end,
defended
the
plane-maker’s
actions
to
try
to
improve
manufacturing
quality
and
to
fix
its
tarnished
safety
reputation
in
the
wake
of
a

midair
door-panel
blowout
on
an


Alaska
Airlines
flight
in
January.

The
company
has
still
not
named
a
replacement
for
Calhoun,
who
took
over
after
its
previous
leader
was
ousted
for
the
handling
of
two
fatal
Boeing
crashes.

“Much
has
been
said
about Boeing’s
culture.
We’ve
heard
those
concerns
loud
and
clear.
Our
culture
is
far
from
perfect,
but
we
are
taking
action
and
making
progress,”
Calhoun
told
the
subcommittee.

Hours
before
the
hearing
the
Senate
subcommittee
released
whistleblower
claims
on
Tuesday
from
Sam
Mohawk,
a
quality-assurance
investigator
at
Boeing,
alleging
the
company
lost
track
of
parts
that
were
damaged
or
not
up
to
specification
and
that
“those
parts
are
likely
being
installed
on
airplanes.”
The
parts
Mohawk
flagged
were
in
Boeing’s
Renton,
Washington,
plant,
where
the
company
makes
its
best-selling
737
Max.

Mohawk
said
he
was
retaliated
against
and
that
he
was
told
by
supervisors
to
hide
evidence
from
the
Federal
Aviation
Administration,
according
to
a
memo
shared
by
the
committee
on
Tuesday. Dozens
of
important
parts
were
stored
outside
during
an
FAA
inspection,
including
42
rudders
as
well
as
winglets
and
stabilizers,
Mohawk
alleged
in
claims
with
the
Occupational
Safety
and
Health
Administration,
the
memo
said.

Boeing
issued
a
written
warning
against
Mohawk,
saying
he
engaged
in
“unacceptable/disruptive
behavior
or
communication,”
according
to
Mohawk’s
complaint,
which
the
subcommittee
also
made
public.
It
said
he
could
be
“discharged”
if
the
behavior
continued.
Mohawk’s
also
alleged
the
company
reduced
staffing
during
his
shift
making
it
difficult
to
complete
tasks.

A
Boeing
spokeswoman
said
the
company
received
the
claims
Monday
night
and
that
staff
are
reviewing
them.

“We
continuously
encourage
employees
to
report
all
concerns
as
our
priority
is
to
ensure
the
safety
of
our
airplanes
and
the
flying
public,”
she
said.

The
FAA
said
it
has
seen
an
increase
in
the
number
of
reports
from
Boeing
staff
since
the
door-plug
blowout
in
January.

“We
thoroughly
investigate
every
report,
including
allegations
uncovered
in
the
Senate’s
work,”
the
agency
said
Tuesday.
The
FAA
declined
to
comment
on
the
specifics
of
the
latest
allegations.

Mohawk
is
not
testifying
before
the
Senate
subcommittee’s
hearing.

The
hearing
and
new
whistleblower
claims
are
further
complicating
matters
for
Boeing.
The
company
already
faces
potential
U.S.
prosecution
after
the
Justice
Department
said
last
month
that
the
plane-maker

violated
a
2021
settlement
tied
to
737
Max
crashes
in
2018
and
2019
that
claimed
346
lives.
A
flight-control
system
Boeing
included
on
the
Max,
the
latest
generation
of
a
jet
that
has
flown
since
the
late
1960s,
was
implicated
in
the
crashes.

That
agreement,
which
protected
the
company
and
its
executives
from
facing
criminal
charges
tied
to
the
crashes,
would
have
expired
just
days
after
the
Alaska
Airlines
incident
in
January.
The
Department
of
Justice
has
until
July
7
to
decide
whether
to
prosecute.

Several
victims’
family
members
attended
Tuesday’s
hearing.
Relatives
of
Max
crash
victims
met
with
DOJ
officials
late
last
month
to
urge
the
U.S.
to
prosecute.

At
the
start
of
the
hearing,
Calhoun
stood
and
apologized
to
the
victims’
families,
many
of
whom
held
photos
of
their
lost
loved
ones.

“We’re
here
because
we
want
Boeing
to
succeed,”
Sen.
Richard
Blumenthal,
D-Conn.,
the
subcommittee’s
chair,
said
at
the
start
of
the
hearing
on
Tuesday,
pointing
to
the
jobs
Boeing
provides
and
the
products
it
supplies
to
the
U.S.
military.
“It’s
not
enough
for
Boeing
to
shrug
its
shoulders
and
say,
‘Mistakes
happen.'”

Blumenthal
railed
against
Boeing’s
responses
to
the
subcommittee’s
request
for
more
information,
holding
up
a
document
and
calling
it
“complete
gobbledygook.”

“I
would
describe
it
precisely
as
you
did,”
Calhoun
replied.

The
company
is
trying
to
stamp
out
quality
flaws
on
jets
and
reduce
so-called
traveled
work
in
which
production
steps
are
completed
out
of
order,
something
it
has
done
to
address
defects.
Last
month,
Boeing
pointed
to
a
host
of
other
changes
to
encourage
workers
to
speak
up
about
problems
in
its
factories
after
several
whistleblowers
raised
concerns
about
quality
issues
and
retaliation.

Calhoun
defended
the
company’s
handling
of
whistleblowers
and
said
that
some
employees
have
been
fired
for
retaliation,
though
he
declined
to
provide
names,
citing
the
individuals’
privacy.

Sen.
Josh
Hawley,
R-Mo.,
accused
Calhoun
and
Boeing
of
“strip
mining”
the
company
by
cutting
corners
and
criticized
his

compensation
package
of
nearly
$33
million,
up
45%
last
year
from
2022.

“And
frankly,
sir,
I
think
it’s
a
travesty
that
you
are
still
in
your
job,”
Hawley
said.

The
FAA
has
taken
a
hard
line
against
Boeing,
with
Administrator
Mike
Whitaker
saying
the
regulator
will
keep
inspectors
on
the
ground
at
the
company’s
facilities
until
the
agency
is
satisfied
with
safety
improvements.

The
FAA
had
already
halted
Boeing’s
ability
to
increase
production
of
the
Max,
its
bestselling
plane.
Whitaker
last
month
said
it
would
likely
be

several
months
before
lifting
that
restriction.

Boeing’s
aircraft
output
has
suffered
from
the
resulting
crisis,
forcing
big
customers
such
as
Southwest
Airlines
and


United
Airlines
to

adjust
their
growth
and
hiring
plans.

Boeing’s
lower
production
and
deliveries
have
hurt
its
cash
flow,
and
it
warned
investors
last
month
that
it
would

burn,
instead
of
generate,
cash
this
year,
using
about
$8
billion
in
the
first
half
of
the
year.

The
company’s
shares
are
down
nearly
33%
this
year
through
Tuesday’s
close,
compared
with
a
roughly
15%
gain
in
the


S&P
500.

Separately,
Boeing
is
facing
supply
chain
issues.


Spirit
AeroSystems,
a
major
supplier
for
both
Boeing
and
Airbus,
said
last
week
that
titanium
entered
the
supply
chain
with
falsified
documents.
The
supplier
said
that
despite
the
falsified
documentation,
more
than
1,000
tests
confirmed
that
the
material
is
“airplane-grade
titanium.”

Boeing
has
been
trying
to
purchase
fuselage
supplier
Spirit,
a
deal
Calhoun
said
is
“more
than
likely”
to
be
finalized
in
the
first
half
of
the
year.
With
less
than
two
weeks
to
go
in
that
period,
Calhoun
declined
to
comment
on
Tuesday
whether
he
still
expects
a
deal
in
that
time
frame.

—
CNBC’s


Ece
Yildirim

contributed
to
this
report.