David Shepardson, Allison Lampert
WASHINGTON (Reuters) – U.S. senators on Tuesday attacked the Boeing (NYSE:) CEO for tarnishing the plane maker’s reputation, overshadowing his apology to families who lost loved ones in the twin 737 MAX crashes and acceptance of responsibility after January’s air emergency.
CEO Dave Calhoun maintained his composure despite repeated questions about how much he is paid, Boeing’s safety culture and why he doesn’t resign immediately instead of resigning by the end of the year at a Senate Permanent Subcommittee on Investigations hearing.
He faced sharp questioning from Republican Sen. Josh Hawley, who asked, “Why didn’t you resign?” and accused Calhoun of “scouting” the company, earning a hefty multimillion-dollar salary in the process.
The hearing marked the first time Calhoun faced questions from lawmakers and drew attention to Boeing’s deteriorating safety record and the departure of its CEO following a leadership change.
Boeing shares fell nearly 2% to $175.03 late Tuesday.
Calhoun acknowledged that the Alaska Airlines door jam incident on Jan. 5 was the result of a manufacturing defect. Boeing also took responsibility for developing a key software system related to fatal crashes in 2018 and 2019 in Indonesia and Ethiopia that killed a total of 346 people.
“I’m here to answer questions. I’m here in the spirit of transparency and I’m here to take responsibility,” Calhoun told reporters earlier as he entered the hearing room.
Senator Richard Blumenthal, who chairs the subcommittee, said at the hearing that there is overwhelming evidence that the US Justice Department should pursue criminal charges against Boeing.
In May, prosecutors found that Boeing failed to “develop, implement and enforce a compliance and ethics program” as part of its deferred prosecution agreement following the fatal crashes. Prosecutors have until July 7 to inform a Texas federal judge of their plans.
Boeing told the US Justice Department last week that it had not violated its deferred prosecution agreement. The DPA defended the company against criminal charges stemming from crashes in 2018 and 2019 that killed 346 people.
Blumenthal said the new whistleblower came forward after a hearing with the previous whistleblower in April. Blumenthal said Tuesday that Sam Mohawk, Boeing’s current quality assurance investigator at the Boeing 737 plant in Renton, Wash., recently told the commission that he witnessed systematic disregard for documentation and liability for nonconforming parts.
In a report released by the committee ahead of the hearing, Mohawk said his job dealing with non-conforming parts has become significantly more “complex and demanding” since MAX production resumed in 2020 following two fatal crashes involving the model.
The report said Mohawk filed a related lawsuit in June with the Occupational Safety and Health Administration.
Boeing said in a statement that the planemaker was reviewing the claims, which became known on Monday. “We continually encourage employees to report any concerns as our priority is to ensure the safety of our aircraft and passengers,” the statement said.
Boeing also said it has increased the size of its quality team and “significantly increased the number of inspections per aircraft since 2019.”
Blumenthal called the hearing a “moment of reckoning” for Boeing.
“Boeing needs to stop thinking about the next earnings report and start thinking about the next generation,” Blumenthal said.
Regulators and airlines have intensified scrutiny of the planemaker since a 737 MAX 9 jet blew out a door on Jan. 5.
The National Transportation Safety Board said four key bolts were missing from the Alaska Airlines plane. The Ministry of Justice opened a criminal investigation into this incident.
On May 30, Boeing submitted a quality improvement plan to the FAA after Whitaker gave the company 90 days to develop comprehensive measures to address “systemic quality control issues.” He prohibited the company from expanding production of the MAX.