Boeing CEO Faces Senate Grilling Over 737 MAX Safety Failures

Boeing CEO Dave Calhoun apologized to families of victims from the 737 MAX crashes and acknowledged Boeing's shortcomings during a Senate hearing. The session highlighted Boeing's safety issues and management shakeups, scrutinizing the company’s failure to maintain a proper compliance and ethics program.

Boeing CEO Dave Calhoun on Tuesday apologized to families who lost loved ones in two 737 MAX crashes and acknowledged the planemaker's shortcomings after a January mid-air emergency involving a 737 MAX 9 raised alarm about its safety record. "I asked that question every day, have we done enough?" Calhoun said in response to questions at a hearing before the Senate Permanent Subcommittee on Investigations.

It marked the first time Calhoun had faced lawmakers' questions and put the spotlight on Boeing's souring safety reputation and the departing CEO who is expected to leave by year's end following a management shakeup. Calhoun said Boeing took responsibility for the development of a key software system linked to the 2018 and 2019 fatal crashes in Indonesia and Ethiopia which killed a combined 346 people.

"I am here to answer the questions. I am here in the spirit of transparency and I am here to take responsibility," Calhoun told reporters earlier as he walked into the hearing room. Senator Richard Blumenthal who chairs the subcommittee told the hearing there is overwhelming evidence that the U.S. Justice Department should pursue prosecution against Boeing.

Prosecutors found in May that Boeing had failed to "design, implement, and enforce a compliance and ethics program" as part of complying with a deferred prosecution agreement following the fatal crashes. Prosecutors have until July 7 to inform a federal judge in Texas of their plans. Boeing told the U.S. Justice Department it did not violate the agreement.

"This is a culture that continues to prioritize profits, push limits, and disregard its workers," Blumenthal said of Boeing. Blumenthal said a new whistleblower has come forward after a hearing with a previous whistleblower in April. Blumenthal said on Tuesday that Sam Mohawk, a current Boeing quality assurance investigator at its 737 factory in Renton, Washington, recently told the panel he had witnessed systemic disregard for documentation and accountability of nonconforming parts. In a report released by the committee ahead of the hearing, Mohawk said his work handling nonconforming parts became significantly more "complex and demanding" following the resumption of MAX production in 2020 following two fatal crashes involving the model.

He alleged that the number of nonconformance reports soared by 300% compared with before the grounding and that the 737 program lost parts that were intentionally hidden from the Federal Aviation Administration during one inspection. The report said Mohawk filed a related claim in June with the Occupational Safety and Health Administration. Boeing said in a statement that the planemaker is reviewing the claims it heard about on Monday. "We continuously encourage employees to report all concerns as our priority is to ensure the safety of our airplanes and the flying public," it said.

Boeing also said it has increased the size of its quality team and "increased the number of inspections per airplane significantly since 2019." Calhoun will acknowledge shortcomings but seek to emphasize the company's efforts to improve.

"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 will say in his written statement, which was seen by Reuters. Blumenthal called the hearing a "moment of reckoning" for Boeing.

"Boeing needs to stop thinking about the next earnings call and start thinking about the next generation," Blumenthal will say on Tuesday. Since the Jan. 5 mid-air blowout of a door plug on a 737 MAX 9 jet, scrutiny of the planemaker by regulators and airlines has intensified.

The National Transportation Safety Board said four key bolts were missing from the Alaska Airlines plane. The Justice Department has opened a criminal investigation into the incident. Last week, Michael Whitaker, head of the FAA, said the agency had been "too hands off" in its oversight of Boeing before the Jan. 5 accident. Another senator has also launched a probe into Boeing. On May 30, Boeing delivered a quality improvement plan to the FAA after Whitaker gave the company 90 days to develop a comprehensive effort to address "systemic quality-control issues." He has barred the company from expanding production of the MAX. Last week, Boeing told the U.S. Justice Department it did not violate a deferred prosecution agreement after two fatal crashes of 737 MAX airplanes, a source familiar with the matter told Reuters. The DPA had shielded the company from a criminal charge arising from crashes in 2018 and 2019 that killed 346 people.

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