(Reuters) – The U.S. Federal Aviation Administration on Wednesday said it was proposing to fine Boeing Co (BA.N) $1.25 million after the agency alleged Boeing managers at its South Carolina plant exerted undue pressure on workers who handle safety oversight work on behalf of the agency.
The FAA said Boeing managers pressured workers to perform inspections on an aircraft that was not eligible for inspection because of various issues; harassed people to make them perform inspections more quickly; threatened to replace workers; and retaliated against a unit manger for filing an undue pressure report by declining to interview the “highly qualified manager” for a promotional position.
The long-standing practice of delegating some FAA tasks to airplane manufacturers has come under criticism after two fatal Boeing 737 MAX crashes raised questions about the program. The FAA in two civil penalty notices alleged Boeing failed to ensure administrators were in a position to effectively represent the FAA’s interests and that some Boeing managers “exerted undue pressure or interfered” with people performing FAA tasks.
Boeing said the proposed fines “are a clear and strong reminder of our obligations” under the Organization Designation Authorization program, or ODA. “Undue pressure of any type is inconsistent with our values and will not be tolerated,” the company said.
Boeing employees tasked with handling certification work on behalf of the FAA – so-called ODA unit members – at Boeing’s South Carolina factory were subjected to undue pressure or interference from at least four Boeing managers between September 2018 and May 2019.
The FAA said the pressure came from executives including the factory’s vice president of 787 operations, a senior quality manager and the director of jet deliveries, according to a 5-page letter from the FAA’s enforcement division in Washington state to Boeing veteran Beth Pasztor, an executive in charge of Product and Services Safety.
The FAA also said Boeing, from roughly November 2017 through July 2019, implemented an organizational structure that did not conform to ODA procedures, with managers in unapproved roles.
The letter says the FAA will take no further action for 30 days to allow Boeing to pay the fines or furnish additional information.
Boeing said in both instances “allegations were appropriately reported, investigated, and disclosed to the FAA” and added it took “corrective action in response.”
A 2016 Boeing survey released by a congressional panel found nearly 40% of 523 employees handling safety-certification work perceived “potential undue pressure” from managers, such as bullying or coercion.
Evidence of “undue pressure” was also pinpointed by a group of international regulators reviewing the 737 Max certification.