What Went Wrong At Boeing

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Military or commercial, if a company is poorly managed or has corrupt management faulty product will emerge. Remember Koito Industries Ltd.? 150K plus faulty seats! From a subsidiary of Toyota, a quality icon.
And, let's not forget the factor of disgruntled employees such as when the union at American Airlines was recently admonished by a judge to stop the work slowdowns.

And keep in mind this is nothing new. (Brewster Aeronautical Corporation.)
 
Joe and Chris, I bow to both of your expertise in aviation but IMHO a single bad cherry can bring down and kill multiple people. So you can test and produce the most perfect product and It may operate better than perfect and then mechanics install defective part XXX. So cherry picking, agreed, but those bad cherries are, at times, responsible for the mechanical failure of the aircraft and the death of all on board.
My point in picking Defense contractors was, that if it happens in the military then how much more common is it in the civilian arena. Some sub-contractor is supplying parts for all of those big commercial aircraft. I don't think that fraud is confined to JUST military contractors.

FLYBOYJ said:
Shenanigans still occur but I think that many of these folks will play nice as they now know what will happen to them if they are caught.
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Joe, the reality is quite the opposite: While small contractors are often barred by the Pentagon from doing business with the Government for several years the large contractors, on which the Pentagon relies most heavily, have never faced anything but temporary suspensions of their right to compete for contracts. The suspensions usually last a few months and inflict little, if any, financial pain. Suspensions are almost always limited to a specific company division.
Twenty-five of the 100 largest Pentagon contractors have been found guilty of procurement fraud in the last seven years, some more than once. Yet not one has been barred from Government contracting.
Just in the last two years there have been 16 cases filed involving 14 of the largest weapons makers. They include Boeing, Grumman and Teledyne, which made payoffs to obtain confidential Pentagon documents; Rockwell International and Emerson Electric, which overcharged the Government, and Fairchild Industries and Northrop, which failed to test certain weapons components or falsified the test results.

The Pentagon, when faced with a big procurement scandal and pressure from Congress and the public to act against a contractor, sometimes quietly presses a company to make changes in its operations or in its management. After a series of scandals involving the General Dynamics Corporation during the late 1970's and early 1980's, the Pentagon put pressure on the company in various ways, including a brief suspension. The company brought in an outsider, Stanley C. Pace, as its new chief executive with a mandate to clean up its operations and image. Pentagon Policy

The Pentagon says its policy is to use suspension and debarment only to protect the Government and the taxpayer from further fraud, and not as punishment. Punitive action, it adds, is properly limited to the judiciary.
"The current system is working," said Eleanor Spector, the Deputy Assistant Secretary of Defense for Procurement. "We have the tools to suspend or debar the companies involved, and anything that smacks of punishment should be the role of the courts."

While the fines imposed in court cases are often substantial, many legislators and experts contend they do little to insure that contractors will not continue to cheat.
"Corporate executives who persistently engage in this kind of theft from taxpayers ought to know they will not just pay a fine that often doesn't cover the cost of correcting the fraud, or throw an underling to the prosecutors," said Representative George Miller, a California Democrat who has proposed legislation that calls for debarment for a company after two convictions in five years.

Mr. Miller and other supporters of stricter sanctions point to a recent case involving the Northrop Corporation.
Northrop was indicted last year on charges of falsifying test results on missile and aircraft components. The Pentagon suspended the division of the company responsible for the tests. But because the suspension applied only to direct purchases by the Government, it did not interrupt the division's work supplying a component to the companies that assemble the Harrier jet for the Marine Corps.
Although Northrop pleaded guilty to the test-fraud charges earlier this year, the Pentagon is now considering rescinding the ban altogether.

In half of the 16 cases involving large contractors in the last two years, the Pentagon took no action against the company. In the other cases, companies or their divisions were suspended for a period of months from receiving new contracts while the Pentagon sought assurances that they were operating responsibly.

In some cases, the companies lost a chance to win large new contracts during their suspensions. As often as not, however, the suspensions had little effect. Teledyne Inc.'s electronics division was suspended last year for six months, after it was implicated in a Pentagon bribery scandal. Despite the suspension, the company was allowed to continue making its products and shipping them to the Government under existing contracts.

After admitting to trafficking in confidential Government documents, the Boeing Company's office near Washington was suspended for three months starting last November, and personnel from that office were barred from dealing directly with the Pentagon.
Boeing assigned people from other offices to deal with the Pentagon, and, since the suspension did not affect any manufacturing plants or specific programs, there was no direct impact, a Boeing spokesman said.
Some companies do not even suffer the inconvenience of a suspension. The Emerson Electric Company pleaded guilty in May to four felony counts related to overcharging the Pentagon for some electronics components. The company paid a $40,000 criminal fine and a $14 million civil settlement but was not suspended.
 
DerAdlerIstGelandet said:
None of the things you describe have anything to do with the manufacturer (i.e., Boeing,
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According to the Federal contractor misconduct data base from 1995 to present BOEING has had:
70 instances of misconduct since 1995 | $1,459.4M in penalties
9/7/2012 Investigation of 2007 F-15 Midair Breakup
Boeing Company $1,000,000
9/29/2004 Delivering Military Aircraft Containing Russian Titanium (Berry Amendment Violation)
Boeing Company $7,400,000
9/29/1998 Defense Services to Russia and Elsewhere (Arms Export Control Act Violation)
Boeing Company $10,000,000
9/2/2008 Inflating the Price of B-1 Bomber Towed Decoy System
Boeing Company $4,000,000
9/1/1997 777 Aircraft Program (Unallowed Costs)
Boeing Company $6,000,000
8/3/2000 Roby v. Boeing (Defective Chinook Helicopters)
Boeing Company $54,000,000
8/2/2000 Aircraft Quality Control Problems
Boeing Company $1,241,000
8/13/2009 Defective Work and Overbilling on KC-10
Boeing Company $25,000,000
8/13/1998 Defective Pricing
Boeing Company $1,850,000
8/11/2009 Quintana v. Boeing (KC-135 Labor Overbilling)
Boeing Company $2,000,000
7/29/2013 Redd et al. v. Goodrich Corporation et al. (Product Liability)
Boeing Company, Rolls-Royce PLC Pending
7/28/2010 December 2008 Hornet Jet Crash
Boeing Company Pending
7/26/2013 Quality Control Violations on Model 777 Airplanes
Boeing Company $0
7/2/2008 USA v. Lesnik (Unauthorized Possession of Defense Information)
Boeing Company $0
7/17/2009 Bogota, Colombia Forced Landing Lawsuit
Boeing Company Pending
7/16/2007 KC-135 and RC-135 Aircraft Parts Overbilling
Boeing Company $1,093,236
7/13/2012 Delays in Providing Explosion Prevention Guidance
Boeing Company $0
7/11/2019 Earl et al. v. Boeing (Conspiracy to Conceal 737 Max 8 Defects)
Boeing Company Pending
6/7/2012 Allison v. Boeing, et al. (Airplane Crash)
Boeing Company, United Technologies Corporation Pending
6/30/2008 Exceeding Limits on Purchases From Foreign Suppliers
Boeing Company $3,000,000
6/27/2011 Improperly Installed Oxygen Systems on B-777 Airliners
Boeing Company $1,050,000
6/27/2011 Duwamish Waterway Jet Fuel Spill
Boeing Company $107,543
6/22/2015 Woods, et al. v. Boeing (Contaminated Cabin Air)
Boeing Company Pending
6/21/2019 Pilot X v. Boeing (737 Max 8 Pilot Class Action)
Boeing Company Pending
5/9/2017 Damage to Air Force One Oxygen System
Boeing Company $0
5/7/2009 Petersen v. Boeing (Saudi Pilot Training Program Lawsuit)
Boeing Company $100,000
5/3/2011 Contract Pricing Problems at Corpus Christi Army Depot
Boeing Company $1,600,000
5/20/2013 Satellite Parts Kickbacks
Boeing Company $0
5/16/2003 Defective Apache Helicopter Fuzz Busters
Boeing Company $3,325,000
5/15/2006 Illegal Hiring of Government Officials and Improper Use of Proprietary Information
Boeing Company $615,000,000
5/12/2014 July 2013 Asiana Airlines Crash
Boeing Company Pending
4/9/2019 737 Max 8 Crashes Shareholder Litigation
Boeing Company Pending
4/20/2002 April and December 2000 V-22 Osprey Crashes
Boeing Company, Textron, Inc. $0
3/4/2003 Arms Export Control Act Violation (Transfer of Rocket Data to China)
Boeing Company $6,000,000
3/30/2001 Wedgetail Project (Arms Export Control Act Violation)
Boeing Company $4,200,000
3/28/2019 737 Max 8 Crashes Civil Litigation
Boeing Company Pending
3/28/2006 Arms Export Control Act Violation (QRS-11 Gyrochip)
Boeing Company $15,000,000
12/22/2015 Settlement of Pending and Potential Enforcement Cases
Boeing Company $12,000,000
11/14/2001 Machine Tools Export Violation (China)
Boeing Company $2,120,000
10/16/2013 October 2010 American Airlines Flight 1640 Emergency Landing
Boeing Company $2,271,652
1/20/2012 Improper Billing on the Chinook Helicopter Program
Boeing Company $4,392,780
 

And if you actually researched those you would see that the majority where not the direct result of Boeing itself. I challenge you to do so...

Boeing is the responsible party and takes the consequences.
 
 

Ditto Chris' response - additionally, you have to look at each division and in some cases individuals who were involved in these situations. I've seen dozens of cases where a Prime contractor took the hit for a rogue employee, with that individual either not knowing he/she was committing a crime or actually committing a crime on their own initiative.
 
Chris, wish I had the expertise to do that. Boeing and other large corporations have herds of lawyers on tap whose only job is fending off and mitigating lawsuits. So if I see things like:
7/26/2013 Quality Control Violations on Model 777 Airplanes
Boeing Company $0

7/2/2008 USA v. Lesnik (Unauthorized Possession of Defense Information)
Boeing Company $0

I'm going to assume that Boeing was acquitted of those charges but on the other hand when I see:
8/3/2000 Roby v. Boeing (Defective Chinook Helicopters)
Boeing Company $54,000,000
It would seem that for Boeing to fork over $54 million they were guilty, i.e.:

On August 28, 1990, the Army accepted delivery of a remanufactured CH–47D helicopter ("Aircraft 89–0165"). The next day, Boeing submitted a claim for payment to the Government, in the form of a $4.1 million invoice for Aircraft 89–0165. On January 11, 1991, after fifty-six flight hours, Aircraft 89–0165 suffered the failure of a defective flight-critical transmission gear 1 and crashed during a low-level contour flight over the Saudi Arabian desert as part of Operation Desert Shield. Aircraft 89–0165 and its contents were totally destroyed at a loss of at least $10 million. The Army replaced Aircraft 89–0165 with a new CH–47D helicopter that cost almost $13 million.

On May 22, 1995, Relator Brett Roby ("Roby") filed a qui tam action under seal pursuant to 31 U.S.C. § 3730(b) on behalf of himself and the Government, alleging that Boeing and its supplier, Speco Corp. ("Speco"), had violated the FCA by making false statements about the manufacture and sale of defective transmission gears to the Army via Boeing's remanufactured CH–47D helicopters. Speco manufactured the gears that Boeing installed into the CH–47D helicopters before their delivery to the Army. On April 30, 1997, the Government intervened and filed an Amended Complaint against Boeing, which was unsealed on May 1, 1997.

In its Answer, Boeing denied the allegations of FCA violations and raised a total of twelve affirmative defenses. Specifically, Boeing claimed: (1) that the HVIC, included by regulation in the helicopter contract, barred the damages sought under the FCA and (2) that consequential damages were not available under the FCA. On August 3, 2000, before trial, the parties reached a settlement under which Boeing made an immediate payment of $25 million. The settlement did not include the FCA claim arising from the Saudi crash; an additional payment of $15 million is contingent upon the outcome of this appeal. We look first to the language of the FCA, which holds a defendant liable for a civil penalty "plus 3 times the amount of damages which the Government sustains because of the act of that person." 31 U.S.C. § 3729(a). The allegedly fraudulent act in this case is Boeing's "false [ ] represent[ation] that the helicopters conformed to contract requirements and fail[ure] to disclose their faulty manufacture to the United States Government." J.A. at 87 (Am. Compl. at ¶ 3).3 Because of this false claim, the Government sustained the loss of Aircraft 89–0165. Therefore, the Government argues that Boeing is liable under the FCA for treble damages as well as a civil penalty. Although the loss of Aircraft 89–0165 occurred after Government acceptance and resulted from the defective Speco gear, it was actually caused by Boeing's initial misrepresentation that the helicopter conformed to contract requirements.

And just as an aside, it would seem that my "one bad cherry" argument is once again evidenced and it cost Boeing dearly
 
In this particular incident, I think Boeing should have stood it's ground.

Investigation of 2007 F-15 Midair Breakup
According to a Department of Defense Inspector General (DOD IG) report, Boeing agreed to provide $1 million in replacement parts for its F-15 fighters in a confidential settlement over a November 2007 incident in which an F-15C Eagle broke apart in midair. An investigation into the incident found that Boeing provided "defective or non-conforming" parts to the Air Force. According to the DOD IG's summary of the investigation, the accident was caused by the failure of the upper-right longeron, a thin strip of material to which the aircraft's skin is attached. The contract required the longeron to be .10 inches thick, but the investigation found that Boeing-supplied longerons varied in thickness from 0.039 to 0.073 inches.
 
Mike go read through everything you just posted. There is a difference between "Boeing" and "Supplier". Boeing however pays the consequences for its suppliers. Thats the point. Additionally many of the ones you posted above, were the results of individuals not the company, but again the company pays the consequences. For instance if I inadvertently land in a foreign country with my work laptop, Boeing is in trouble for Arms Export Control Act Violation because of the info on it.
 

Who the supplied the parts to Boeing?

I highly doubt your information is correct anyhow. Can you provide a link. Do you know how thick 0.039 to 0.073 inches. There is no way that made its way onto an aircraft.
 
mikewint said:
The contract required the longeron to be .10 inches thick, but the investigation found that Boeing-supplied longerons varied in thickness from 0.039 to 0.073 inches.
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DerAdlerIstGelandet said:
Who the supplied the parts to Boeing?

I highly doubt your information is correct anyhow. Can you provide a link. Do you know how thick 0.039 to 0.073 inches. There is no way that made its way onto an aircraft.
Click to expand...

Specifics needs - depending where on the aircraft they are located they could be tapered, very common in aircraft construction.

Additionally there could have been a Material Review Board (MRB) action where those parts were deemed acceptable by an engineer.

BTW Mike - I'm sure you heard of the $600 toilet seat? I was involved in the post media hype investigation. What was never mentioned is Lockheed actually overcharged the government something like $35 per unit and that was a clerical error. The seat was part of the toilet unit that went on the P-3. It looked something like this.



It was reinforced fiberglass and had to be fire resistant IIRC. Once could compare it to a fiberglass fender for a Corvette



I see these currently running between $350 and $1700

Add in the testing and inspection cost and this whole fiasco was nothing but a red herring.

BTW - IIRC Lockheed paid back the government for the $35 per unit error.

So don't believe all those internet articles you're fishing around for, many of them do have a twist at the end of the day!!!
 
As I remember (and could be wrong) the 600 dollar pricing was also because the toilet cover was out of production. The government ordered a small number (like 2?) in one fiscal year and the molds had to be taken out of storage, cleaned, set up, the parts made and the molds put back in storage. Had the government ordered twice as a many parts the cost per part would have been much lower even if the total spent was a bit a higher.
 

True, did not think of either of those.
 
That F-15C longeron was manufactured in 1979, when Boeing was not involved with the F-15. As a former ALC engineer I'll admit that a manufacturing error of that magnitude was shocking. Admittedly, due to the shape of that part it would have been hard to spot without at least the kind of First Article Inspection that we used to do at the ALC for new suppliers.

As for the toilet seat, not only was it a unique part, not one you could buy at Home Depot, if you checked on a comparable part for an automobile you likely would not find it any cheaper.

Then there was the famous $400 hammer. Now go look at the Federal Govt test requirements for that hammer, including the right to audit your company's books from top to bottom and it's a wonder it only cost $400.

The real kicker was one I found in 1981. We asked for a quote on buying new rocket engine igniters for some older missiles; a special production run would be required. The price, $100K for a box full, was not that bad. Then I looked at the details. The specification said to put it in a cardboard box and stick a couple of P-38 can openers in there, lest we miss WWIII because no one had a can opener handy. The cost for those two can openers would have been $3000. You could buy two of the same kind of thing at K-Mart for $2.00. What the bidding company did was go out and get quotes for each of the items required. For Mil-Spec C-Ration can openers the minimum order quantity from the manufacturer probably was something like 10,000 each. So that went into the bid.
 

And that is a good point as well. Boeing did not merge with McDonald Douglas until 1997. Still though at that point, once Boeing took over, they take all responsibilty.

Everything around here is still named after McDonald Douglas. "Phantom Blvd", "James S. McDonell Blvd.", etc...
 
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A friend of mine got "fired" by none-other than Mr Mac. He worked for NASA and went to St Louis for some discussions on the Gemini program. He asked a McDonnell engineer for a copy of a drawing. The engineer told him to have a seat; he'd go get the drawing and be back soon. My friend sat down, saw a newspaper and picked it up to read a bit while he waited on the drawing. Mr Mac came by in his golf cart, saw him reading the paper and ordered, "Fire that man!"
 
mikewint said:
In this particular incident, I think Boeing should have stood it's ground.

Investigation of 2007 F-15 Midair Breakup
but the investigation found that Boeing-supplied longerons varied in thickness from 0.039 to 0.073 inches.
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Great. Assuming it was still underspec, (What were the limit's?) it was still past it's design life and was made by another company prior to a merger.
 
Not true about being out of production. this happened during the early 1980s, the P-3 was in full production at the time, about 10 - 20 a year being built
 
FLYBOYJ said:
Not true about being out of production. this happened during the early 1980s, the P-3 was in full production at the time, about 10 - 20 a year being built
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Yes, but the seat might have been a one time build (production run) and stored. We see "lifetime" buys (That aren't.) in aerospace all the time.
 
jetcal1 said:
Yes, but the seat might have been a one time build (production run) and stored. We see "lifetime" buys (That aren't.) in aerospace all the time.
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I hear ya but no - the vendor was manufacturing them for both production and spares. As stated I worked on the program and actually had to inspect a few of these and audit the vendor's facility. I don't remember their name but they were located close to Burbank where the P-3 was being built at the time.
 
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