Category Archives: Boeing

Boeing to temporarily suspend Puget Sound production operations

Boeing has announced a temporary suspension of production operations at its Puget Sound area facilities in light of the state of emergency in Washington state and the company’s continuous assessment of the accelerating spread of the coronavirus in the region. These actions are being taken to ensure the well-being of employees, their families and the local community, and will include an orderly shutdown consistent with the requirements of its customers.

Boeing plans to begin reducing production activity today and projects the suspension of such operations to begin on Wednesday, March 25, at sites across the Puget Sound area. The suspension of production operations will last 14 days, during which Boeing will continue to monitor government guidance and actions on COVID-19 and its associated impacts on all company operations. During this time, we will be conducting additional deep cleaning activities at impacted sites and establishing rigorous criteria for return to work.

“This necessary step protects our employees and the communities where they work and live,” said Boeing President and CEO Dave Calhoun. “We continue to work closely with public health officials, and we’re in contact with our customers, suppliers and other stakeholders who are affected by this temporary suspension. We regret the difficulty this will cause them, as well as our employees, but it’s vital to maintain health and safety for all those who support our products and services, and to assist in the national effort to combat the spread of COVID-19,” Calhoun added.

Production employees should continue to report for their assigned shifts today and will receive guidance on their role in the suspension shutdown process.

Puget Sound area-based employees who can work from home will continue to do so. Those who cannot work remotely will receive paid leave for the initial 10 working days of the suspension – double the company policy – which will provide coverage for the 14 calendar day suspension period.

“We will keep our employees, customers and supply chain top of mind as we continue to assess the evolving situation,” Calhoun said. “This is an unprecedented time for organizations and communities across the globe.”

When the suspension is lifted, Boeing will take an orderly approach to restarting production with a focus on safety, quality and meeting customer commitments. This will be a key step to enabling the aerospace sector to bridge to recovery.

Boeing is working to minimize this suspension’s impact on the company’s ability to deliver and support its defense and space programs, and ensure the readiness of our defense customers to perform their vital missions. Boeing will work closely with those customers in the coming days to develop plans that ensure customers are supported throughout this period. Critical distribution operations in support of airline, government, and maintenance, repair and overhaul (MRO) customers will continue.

Reuters: Boeing considers a stop in production as coronavirus spreads

From Reuters:

“Boeing Company is leaning toward a temporary work stoppage at its twin-aisle jetliner factories due to the spread of coronavirus, people familiar with the matter said on Thursday, echoing a similar move by European rival Airbus SE.”

Reuters: Boeing to separate 737 MAX wire bundles before jet’s return to service

Reuters issued this report:

“Boeing Company plans to separate 737 MAX wiring bundles, flagged by regulators as potentially dangerous, before the jet returns to service, two people familiar with the matter told Reuters on Wednesday.”

Read the full report.

Copyright Photo: Rainer Besten. Southwest Boeing 737-8 MAX 8s in storage at Victorville.

Nearly one year after launching its Boeing 737 MAX investigation, House Transportation Committee issues preliminary investigative findings

On March 6, 2020, nearly one year after launching its investigation into the design, development, and certification of the Boeing 737 MAX, the House Committee on Transportation and Infrastructure Majority Staff released its preliminary investigative findings.

The Boeing 737 MAX, which was certified by the FAA and entered revenue service in 2017, was involved in two fatal crashes within five months of each other that killed a total of 346 people, including 8 Americans. The aircraft remains grounded worldwide.

Copyright Photo: 737s in storage at Victorville, CA (Rainer Bexten).

The Committee’s preliminary findings, titled “The Boeing 737 MAX Aircraft: Costs, Consequences, and Lessons from its Design, Development, and Certification,” outlines technical design failures on the aircraft and Boeing’s lack of transparency with aviation regulators and its customers as well as Boeing’s efforts to obfuscate information about the operation of the aircraft.

The Committee’s investigation, as detailed in the preliminary findings, focuses on five main areas:

  • Production pressures on Boeing employees that jeopardized aviation safety;
  • Boeing’s faulty assumptions about critical technologies, most notably regarding the Maneuvering Characteristics Augmentation System, or MCAS;
  • Boeing’s concealment of crucial information from the FAA, its customers, and pilots;
  • Inherent conflicts of interest among authorized representatives, or ARs, who are Boeing employees authorized to perform certification work on behalf of the FAA; and
  • Boeing’s influence over the FAA’s oversight that resulted in FAA management rejecting safety concerns raised by the agency’s own technical experts at the behest of Boeing.

To read the preliminary findings and see specific examples from the Committee’s investigation, click here.

“Our Committee’s investigation will continue for the foreseeable future, as there are a number of leads we continue to chase down to better understand how the system failed so horribly. But after nearly 12 months of reviewing internal documents and conducting interviews, our Committee has been able to bring into focus the multiple factors that allowed an unairworthy airplane to be put into service, leading to the tragic and avoidable deaths of 346 people,” Chair Peter DeFazio (D-OR) said. “As we release this report to lay out our findings to date, my thoughts are with the families of the victims. Our search for answers continues on their behalf and for everyone who boards an airplane. The public deserves peace of mind that safety is always the top priority for everyone who has a role in our aviation system.”

“Nearly one year ago, the Ethiopian Airlines Flight 302 tragedy devastated families and communities across the globe. The victims of this tragedy and Lion Air Flight 610, their families, as well as the traveling public, rightfully expect Congress to act,” Chair Rick Larsen (D-WA) said. “The Committee’s preliminary investigative findings, combined with the findings and recommendations from the Lion Air investigation, National Transportation Safety Board, Joint Authorities Technical Review and other entities, makes it abundantly clear Congress must change the method by which the FAA certifies aircraft. As Chair of the Aviation Subcommittee, I will work with Chair DeFazio and the Committee to address the issues identified in the certification process to improve safety, including the integration of human factors in aircraft certification. As the Committee enters the next phase of its oversight investigation, I will continue to keep the victims and their families at the forefront.”

In the coming weeks, Chairs DeFazio and Larsen intend to introduce legislation that will address failures in the certification process uncovered by the Committee’s investigation.

Background: As part of its ongoing investigation, the Committee has held five public hearings with more than a dozen witnesses; obtained hundreds of thousands of pages of documents from Boeing, the FAA, and others involved in the aircraft’s design; heard from numerous whistleblowers who contacted the Committee directly; and interviewed dozens of former and current employees of both Boeing and the FAA. For information on past hearings, statements, and documents, click here.

Boeing enlists Ken Feinberg and Camille Biros to oversee $50 million Boeing Community Investment Fund to support communities affected by Lion Air flight 610 and Ethiopian Airlines flight 302 accidents

Boeing made this announcement:

Boeing has announced it has dedicated the remaining $50 million of a previously announced $100 million fund to support humanitarian needs in communities affected by the Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents. The Boeing Community Investment Fund will work directly with victims’ families to enable them to donate to eligible charities of their choosing. The company will partner once again with Ken Feinberg and Camille Biros on the fund’s creation, allocation and distribution. Feinberg and Biros will immediately begin working with families, governments and other interested parties to identify eligible charitable organizations. All monies distributed by Feinberg and Biros will be independent of any resolution provided through the legal process.

“Following months of extensive discussions with victims’ families, government officials, community leaders and others, we determined the best path forward – both for those who lost loved ones and the communities affected by these accidents – is to empower the families to decide how to allocate these funds,” said Tim Keating, Boeing’s executive vice president of Government Operations, who oversees the company’s charitable activities. “Through this donation, it is our hope the families will be able to honor their loved ones in a manner that is both personal and meaningful to them while also creating a lasting legacy in their communities around the world.”

Work also continues on the previously announced $50 million Boeing Financial Assistance Fund, which is providing near-term financial assistance to families of the victims.

“When we made our initial $100 million pledge, our first priority was to ensure that we provided families with immediate financial assistance,” said Keating. “Ken Feinberg and Camille Biros have made tremendous progress on that effort. Given their success and the trust they have built with the families, we have now asked Ken and Camille to oversee the important work of connecting families with the charitable organizations they deem most meaningful.”

Boeing loses $636 million in 2019

Boeing issued this financial report:

The Boeing Company reported fourth-quarter revenue of $17.9 billion, GAAP loss per share of ($1.79) and core loss per share (non-GAAP)* of ($2.33), primarily reflecting the impacts of the 737 MAX grounding (Table 1). Boeing recorded operating cash flow of ($2.2) billion and paid $1.2 billion of dividends.

“We recognize we have a lot of work to do,” said Boeing President and Chief Executive Officer David Calhoun. “We are focused on returning the 737 MAX to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public. We are committed to transparency and excellence in everything we do.  Safety will underwrite every decision, every action and every step we take as we move forward. Fortunately, the strength of our overall Boeing portfolio of businesses provides the financial liquidity to follow a thorough and disciplined recovery process.”

Commercial Airplanes fourth-quarter revenue was $7.5 billion and fourth-quarter operating margin decreased to (38.1) percent reflecting lower 737 deliveries and an additional pre-tax charge of $2.6 billion related to estimated potential concessions and other considerations to customers related to the 737 MAX grounding (Table 4). The estimated costs to produce 737 aircraft included in the accounting quantity increased by $2.6 billion during the quarter, primarily to reflect updated production and delivery assumptions. In addition, the suspension of 737 MAX production and a gradual resumption of production at low production rates will result in approximately $4 billion of abnormal production costs that will be expensed as incurred, primarily in 2020.

Commercial Airplanes delivered 79 airplanes during the quarter, including 45 787’s, and captured orders for 30 737 MAX aircraft at the Dubai Air Show and 2 777 freighters for Lufthansa. The 787 program also booked 36 net orders in the quarter. As previously announced, the 787 production rate will be reduced from the current rate of 14 airplanes per month to 12 airplanes per month in late 2020. Based on the current environment and near-term market outlook, the production rate is expected to be further adjusted to 10 airplanes per month in early 2021, and return to 12 airplanes per month in 2023. The first flight of the 777X was completed on January 25, and first delivery is targeted for 2021.

Commercial Airplanes backlog included over 5,400 airplanes valued at $377 billion.

Full-Year 2019

  • Revenue of $76.6 billion, GAAP loss per share of ($1.12) and core (non-GAAP)* loss per share of ($3.47)
  • Operating cash flow of ($2.4) billion; cash and marketable securities of $10.0 billion
  • Total backlog of $463 billion, including over 5,400 commercial aeroplanes