Boeing Settles with FAA on 737 Penalties

 - May 27, 2021, 9:38 AM

Boeing has reached a settlement agreement with the FAA that calls for it to pay at least $17 million in penalties in connection with production deficiencies the agency determined compromised safety in the 737 Max and NG. In a statement released Thursday, the FAA said it found that the manufacturer installed equipment on 759 Boeing 737 MAX and NG aircraft containing guidance system sensors not approved for that equipment; submitted 178 Boeing 737 Max aircraft for airworthiness certification after installing “potentially” nonconforming slat tracks; and improperly marked those slat tracks.

The settlement stems from a pair of FAA penalty proposals in early 2020, one issued that January involving the nonconforming slat tracks and the other, issued that March, in response to the sensor issue.

Boeing agreed to pay the $17 million penalty within 30 days after signing the agreement. While the FAA said Boeing must perform certain corrective actions within specific timeframes or risk further penalties of $10.1 million, Boeing insists it has already addressed the problems.

“We take our responsibility to meet all regulatory requirements very seriously,” said Boeing in a statement. “These penalties stem from issues that were raised in 2019 and which we fully resolved in our production system and supply chain. We continue to devote time and resources to improving safety and quality performance across our operations. This includes ensuring that our teammates understand all requirements and comply with them in every way.”

The corrective actions cited by the FAA on Thursday include strengthening procedures to ensure that Boeing does not install any parts that fail to conform to their approved design; performing safety risk management analyses to determine the fitness of its supply-chain oversight processes and Boeing’s readiness to safely increase the Boeing 737 production rate; and revising the company’s production procedures to enable the FAA to observe production rate readiness assessments, the data on which the company bases the assessments, and the results of the assessments.

The FAA has also asked Boeing to take steps to reduce the chance that it presents to the FAA aircraft with nonconforming parts for airworthiness certification or a certificate of export and to implement “enhancing processes” to improve its oversight of parts suppliers.