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Boeing Hit With $3.9 Million Fine for Alleged Safety Lapses

Bloomberg logoBloomberg 12/7/2019 Alan Levin
a large passenger jet sitting on top of a runway: The Boeing Co. logo sits on the side of a 737 Max aircraft during preparations ahead of the Farnborough International Airshow 2016 in Farnborough, U.K.© Bloomberg The Boeing Co. logo sits on the side of a 737 Max aircraft during preparations ahead of the Farnborough International Airshow 2016 in Farnborough, U.K.

(Bloomberg) -- The U.S. government hit Boeing Co. with a proposed $3.9 million fine on Friday, saying the planemaker installed substandard parts on 133 aircraft and didn’t properly oversee its suppliers.

The Federal Aviation Administration said the parts in question were installed on the wings of Boeing 737 jets to allow devices known as slats to move back and forth.

The civil penalty comes as the company has been embroiled in controversy over how it designed its 737 Max, which was involved in two fatal crashes that killed 346 people and has been grounded since March 13.

Friday’s proposed fines aren’t related to those accidents.

On Friday, the FAA alleged Boeing “knowingly” sought FAA certification of aircraft that had the faulty parts installed, after determining that the devices had failed a strength test.

Slat Tracks

The so-called slat tracks, which were supplied by subcontractors, had become brittle during a process to add a cadmium-titanium plating, the FAA said.

Boeing has 30 days to respond to the FAA and may dispute the allegations. The regulator often negotiates to lower penalties, particularly if companies agree to take steps to address the issue under review.

The planemaker said in an emailed statement that it’s aware of the FAA allegations and is working closely with its customers to address the issue. No planes currently in service have any of the faulty parts, the company said.

‘Top Priorities’

“Safety and quality are Boeing’s top priorities, and Boeing has made a number of significant changes to our organization and processes in recent months that will reinforce and enhance this commitment,” Boeing said.

The company in 2015 agreed to pay a $12 million fine and to take steps to improve its internal compliance methods to settle multiple cases under investigation by the FAA.

The FAA had charged in that instance that Boeing was too slow to produce fuel-tank safety devices that were ordered by the government, according to a press release by the agency. A second case alleged that the company failed to maintain quality control and allowed the use of unauthorized fasteners on its 777 aircraft.

Related: Boeing 737s Undergo Review for Wing Parts Prone to Cracking

In the latest action, the faulty parts were installed on 737 NG planes as well as its successor, the Max family. The issue prompted FAA to order urgent inspections of more than 300 planes in June.

Slat tracks allow a device at the front of the wing to move forward to expand the size of the wing and improve lift for landing and takeoff. The FAA last June said a failure in flight of a slat track wouldn’t automatically cause a crash, but would cause damage and could lead to an emergency.

The FAA charges involve several Boeing subcontractors. Spirit AeroSystems Inc. was contracted to supply the slat tracks to Boeing. It hired Kencoa Aerospace Co. to supply them, and Kencoa turned to Southwest United Industries Inc. to process the devices.

Brittle Parts

The three companies didn’t immediately respond to messages requesting comment.

Even after being notified by Spirit that the parts were brittle and prone to premature cracking, Boeing continued installing them and certified that the planes met FAA standards, the agency said.

In addition to being substandard, the parts weren’t marked properly; as a result, the serial numbers identifying them were either obscured or became unreadable, the agency said.

(Updates with subcontractor names, more details starting in 11th paragraph.)

To contact the reporter on this story: Alan Levin in Washington at alevin24@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Ros Krasny, John Harney

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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