October 30, 2019

Hearing Ends With Victims Kin Urging CEO to Quit: Boeing Update
(Bloomberg) -- Boeing Co. President Dennis Muilenburg testifies before House lawmakers Wednesday, the day after being peppered with tough question in the Senate during his first appearance before lawmakers since a pair of the planemaker’s 737 Max jets crashed, killing 346 people.In both crashes, faulty data from one of two angle-of-attack sensors, which measure the pitch of the plane against the oncoming stream of air, caused a flight control system called MCAS to drive down the jet’s nose, which pilots struggled to counteract before ultimately entering a fatal dive.Muilenburg faced the House Transportation and Infrastructure Committee, chaired by Oregon Democrat Peter DeFazio, who’s overseen a months-long investigation into the certification of the 737 Max.Here are the key developments:Hearing Ends With Victim’s Kin Urging CEO to Quit (3:52 p.m.)The mother of a young woman killed in the Ethiopian Airlines crash confronted Muilenburg after the hearing in front of a phalanx of reporters and cameras, demanding that he step down from the company.Nadia Milleron, mother of Samya Rose Stumo, 24, said she and other family members were struck by the Boeing executive’s repeated references in testimony to his upbringing on a farm in Iowa.“The whole group said, ‘Go back to the farm, go back to Iowa,’’’ she told him. “You’re not the person anymore to solve the problem.’’“I respect that, I really do,’’ Muilenburg responded as aides stood by. “What I learned from my father in Iowa is when things happen on your watch, you have to own them and you have to take responsibility.’’\-- Courtney Rozen, Alan LevinDocument Shows Max Feature Didn’t Follow Specs (3:32 p.m.)A June 2018 Boeing document, unveiled at the hearing by Representative Greg Stanton, an Arizona Democrat, detailed internal design requirements for MCAS, including one specifying that “MCAS shall not interfere with dive recovery.”In the two crashes, the planes dove steeply after pilots struggled with MCAS failures.“Boeing did not even follow its own design requirements when it created this MCAS system and put it on the Max," Stanton said.The document is one of many showing what Indonesian investigators concluded Friday: that the planemaker assumed pilots would quickly respond to such a failure but their actual actions showed those assumptions weren’t realistic.Asked by Stanton whether MCAS affected the dive recovery on the doomed Lion Air flight, Hamilton said “it caused the airplane to go into a dive that the crews were not able to recover from” after the pilots didn’t respond as Boeing assumed they would.The document also said: “MCAS shall not have any objectionable interaction with the piloting of the airplane.”\-- By Alan Levin, Ryan BeeneMax’s MCAS Getting What Air Force Had From Start (2:39 p.m.)Michigan Republican Representative Paul Mitchell asked why the 737 Max’s version of MCAS had key differences from a midair refueling tanker Boeing supplies to the U.S. Air Force. He pointed out that the Pentagon required that the KC-46 tanker’s MCAS system activate only once, when the civilian application could -- and did -- fire repeatedly, he said.“Why the difference? What motivated that?” the lawmaker said.John Hamilton, chief engineer of Boeing Commercial Airplane division, cited specifications set by the Air Force. Muilenburg said the tanker’s MCAS system was designed for different flight scenarios than the 737 Max’s version.The Air Force has said the KC-46’s MCAS systems incorporated data from two angle-of-attack sensors, rather than one sensor as originally designed on the 737 Max.Boeing has redesigned the Max’s MCAS to ensure that the system can’t be activated repeatedly and that it relies on both of the plane’s sensors.\-- By Ryan BeeneCEO Slammed Over $23 Million Pay, Asked to Resign (1:17 p.m.)Representative Stephen Cohen, a Tennessee Democrat, blasted Muilenburg for failing to take a cut in pay after the 737 Max crashes, the first time he’s been publicly quizzed about why he didn’t forgo pay after the crashes.The Boeing Co. CEO received $23.4 million last year, a sum that includes a $13 million bonus. His total compensation rose 27% from a year earlier.Muilenburg said that he hasn’t offered to resign, and that it’s up to the company’s board to decide whether to dock his pay.“These two accidents happened on my watch. I feel responsible to see this through,” Muilenburg said. Earlier in the hearing, Muilenburg spoke about his humble upbringing in Iowa and the beginning of his career at the company as an intern.Nadia Milleron, mother of 24-year-old Ethiopian Airlines crash victim Samya Rose Stumo, said outside the hearing room that she was outraged that Muilenburg received a bonus in 2018.“He is not the human being to be doing this job, and neither is his board,” Milleron said.\-- By Courtney Rozen, Julie Johnsson, Alan LevinMuilenburg Grilled on 737 Production Meltdown (12:12 p.m.)Muilenburg was grilled by Representative Albio Sires, a Democrat from New Jersey, on a production meltdown last year caused by a shortage of parts as suppliers fell behind a new, record manufacturing pace at which 737 jets were built.Sires read from a June 2018 email a senior manager who led a final assembly team at Boeing’s plant south of Seattle sent to Scott Campbell, who was vice-president and general manager of the 737 program at the time.The Boeing manager warned that schedule pressure and fatigue are “creating a culture where employees are either deliberately or unconsciously circumventing established processes.” He added: “And for the first time in my life, I’m sorry to say that I’m hesitant about putting my family on a Boeing airplane.”The factory issues raised by the employee weren’t related to MCAS.Muilenburg said he’d read the concerns of the manager, who has since retired. The company took action to address the out-of-schedule work, including adding quality checkpoints, he said. The manufacturing pace for the 737 was trimmed 19% to a 42-jet monthly pace after the Max was grounded globally.\-- By Julie JohnssonCEO ‘Will Never Forget’ Hearing Victims’ Stories (11:54 a.m.)In an emotional exchange, Muilenburg described a private meeting Tuesday with the victims’ loved ones -- many of whom have attended the hearings displaying large pictures of their smiling children, siblings and spouses.“We wanted to listen and each of the families told us the stories of the lives that were lost and those were heart breaking,” said Muilenburg, his voice breaking with emotion. “I’ll never forget that.”Michael Stumo, whose daughter died in the Ethiopian Airlines crash, told reporters Tuesday after the session that, “It was very emotional.”“But he was there, he heard, and he expressed his sorrow appropriately, and expressed a desire to change the culture of the company to make it better,” Stumo said.\-- By Alan Levin, Courtney RozenCEO Acknowledges 737 Design Shortcomings (11:30 a.m.)Muilenburg offered his most candid public assessment of the company’s shortcomings in designing a system implicated in two 737 Max crashes, after insisting for months that engineers followed the manufacturer’s and Federal Aviation Administration processes.He said the company erred when it made a cockpit alert to inform pilots of disagreements between the 737 Max’s two angle-of-attack sensors available on only some of the jets instead of all, saying “we got that wrong up front.”He also cited the original architecture of MCAS, which the company redesigned to incorporate readings from both angle-of-attack sensors instead of one on the original design. Thirdly, he said the company needs to improve communication and documentation.But Muilenburg declined to name specific employees at Boeing or its 900-company supply chain who contributed to the botched design. “Mr. Chairman, my company and company alone is responsible,” he said. “I am accountable and my company is accountable.”“We can and must do better,” Muilenburg said.\-- Julie Johnsson, Ryan BeeneLawmaker Confronts CEO With Internal Documents (10:53 a.m.)DeFazio displayed slides of internal Boeing documents and emails -- some never before seen publicly -- raising questions about the development of MCAS, the flight control system linked to both crashes.In both fatal crashes, faulty data from one of two angle-of-attack sensors, which measure the pitch of the plane against the oncoming stream of air, caused the MCAS to drive down the jet’s nose, which pilots struggled to counteract before ultimately entering a fatal dive.In one document from 2015 a Boeing employee questioned the decision to permit MCAS to be triggered by only one of the two sensors mounted on the jet’s nose. Boeing has since redesigned MCAS to prevent a repeat of such a failure, in part by incorporating readings from both angle-of-attack sensors.“I guess the question is, why wasn’t it that way from day one?” DeFazio said.Another document from 2018 examined Boeing’s assumptions about how quickly pilots would respond to an MCAS malfunction.Muilenburg concedes Boeing made three mistakes on MCAS: designing it to activate with a single sensor, omitting it from pilot training and under-estimating how long pilots would take to respond when the system kicked on.“We made some mistakes. We discovered some things we didn’t do right. We own that. We are responsible for our planes,” Muilenburg said. “If we knew then what we know now we would have done it differently.”\-- be Ryan Beene, Julie JohnssonDay Two Opens with CEO Response to New Allegations (10:03 a.m.)As he was arriving for the hearing, Muilenburg told reporters that the safety concerns that prompted a manager to urge the company to pause the 737 Max assembly line were unrelated to the two fatal crashes by the jet.The issue was related to “concerns about production line safety as we were moving to production rate changes,” Muilenburg said.The comment came in response to assertions made Tuesday by DeFazio that a Boeing manager urged a superior to halt the 737 Max assembly line over safety concerns, one of a number of new allegations stemming from an investigation began by the panel days after the second 737 Max crash last March.“We now know of at least one case where a Boeing manager implored the then-vice president and general manager of the 737 program to shut down the 737 Max production line because of safety concerns, several months before the Lion Air crash in October 2018,” DeFazio wrote in prepared remarks for the hearing.More:Boeing Manager Sought to Halt 737 Max Production Over SafetyKey Events:Muilenburg’s testimony on Tuesday came one year from the day when a Lion Air 737 Max plunged into the Java Sea, killing all 189 people on board. The appearances are the first public questioning of a senior Boeing leader by lawmakers since the crash and a subsequent one by an Ethiopian Airlines 737 Max in March, which killed all 157 people on board that led to the worldwide grounding of the company’s top-selling and most profitable passenger jet.Uncertainty over when the 737 Max family of jets will fly again is rippling through the airline industry and Boeing’s finances. The U.S. manufacturer’s bill is $9.2 billion and rising, as it faces questions about the plane’s development and its own transparency. Boeing is aiming for a return to service later this year but some airlines have pulled Max flights through next year.Both Democratic and Republican Senators alike grilled Muilenburg on Tuesday, especially on whether Boeing had too much sway in certifying the 737 Max through a longstanding program at the U.S. Federal Aviation Administration that deputizes company employees to issue safety approvals on the agency’s behalf.Muilenburg defended that program during the hearing and refused to publicly endorse any specific reforms when pressed by Senate lawmakersA report released Friday by Indonesian investigators highlighted the role of designees in approving the 737 Max design, including what investigators have flagged as a key vulnerability in the jet’s flight controls that malfunctioned during the fatal crashes.\--With assistance from Courtney Rozen, Ryan Beene, Alan Levin and Julie Johnsson.To contact Bloomberg News staff for this story: Alan Levin in Washington at alevin24@bloomberg.netTo contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, ;Brendan Case at bcase4@bloomberg.net, Elizabeth WassermanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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