Boeing to pay $17
million to settle plane production issues
Federal officials
say Boeing will pay at least $17 million and take steps to fix production
problems on its 737 jets, including the Max.
The Federal
Aviation Administration said Thursday that the settlement covers the
installation of unapproved sensors and other parts on some Boeing 737 NG
and 737 Max planes built between 2015 and 2019.
The settlement,
while not a large sum for Boeing — the company had $15 billion in revenue
in 2020, a down year — is the latest black eye for the iconic American
manufacturer. Boeing is still struggling to recover from two deadly crashes
that led to a long grounding of Max jets worldwide and other problems that
have plagued the Max and other aircraft models.
The FAA said
Boeing will pay the $17 million civil penalty within 30 days and could be
hit with about $10 million in additional fines if it fails to take steps
including preventing the use of unapproved parts. The FAA said Boeing also
must analyze whether the company and its suppliers are ready to safely
raise production rates for the 737.
A Boeing spokesman
said the company “fully resolved” the problems in its production system and
supply chain. “We continue to devote time and resources to improving safety
and quality performance across our operations,” including ensuring that
employees comply with regulatory requirements, the spokesman, Ivan Gale,
said.
The settlement
covers issues previously identified by the FAA. The agency had proposed a
$19.7 million penalty for Boeing's use of unapproved sensors on nearly 800
planes and $9.3 million for installing unapproved wing panels on more than
300 planes including Max jets and an older 737 model called the NG. The
wing panels provide extra lift during takeoff and landing, and ones made by
a Boeing contractor had failed a quality test.
In January, Boeing
agreed to pay $2.5 billion to avoid possible criminal prosecution for
deceiving regulators about the safety of the Max. It faces lawsuits filed
by families of passengers killed in the Max crashes.
Since the FAA
cleared the Max to return to flight late last year, more than 100 newly
built ones were idled by a problem with electrical grounding of some
cockpit equipment. Boeing also held up deliveries of the larger 787 jet for
several months because of a flaw in how panels of the carbon-fiber fuselage
were joined.
This month, two
leaders of the House Transportation Committee said they are requesting more
information from Boeing and the FAA about those recent problems.
Shares of
Chicago-based Boeing Co. rose $9.33, or almost 4%, to close Thursday at
$250.70 after the CEO of its largest customer, Southwest Airlines, said the
airline has room to add nearly 500 new planes in the coming years.
Southwest CEO Gary Kelly told The Dallas Morning News that the airline will
need more planes after adding new destinations and restoring its network
after the coronavirus pandemic slowdown that hit travel last year.
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