Boeing has made ‘drastic’ changes to root out defects, CEO says

Boeing Co. Chief Executive Officer Kelly Ortberg said the U.S. planemaker has implemented sweeping changes to reduce the number of defects and hitches in its production line, as he faced questions from U.S. senators about the company’s recovery from several high-profile accidents.

Among the improvements, Boeing has stepped up inspections in its factories and at a key supplier while working to simplify processes, Ortberg said. Fewer workers can now also perform the task of removing components like door plugs, he said. Early last year, such an improperly attached fuselage panel came loose during a passenger flight, throwing the company into crisis and eventually leading to a management upheaval that brought in Ortberg.

Among other positive signs to emerge from Ortberg’s overhaul are a 50% drop in so-called traveled work, which signifies production processes that are out of sequence, the CEO said. The company has also seen a 56% decline in defects coming from Spirit AeroSystems Holdings Inc., the supplier of its fuselages. Boeing is in the process of buying back Spirit to gain closer control over the partner’s processes.

Every fuselage door now undergoes additional inspections to ensure there aren’t any defects that might cause rework at a later date, the CEO said.

The near-catastrophe last year on Jan. 5 was a “cathartic moment for all of us,” Ortberg said at the hearing, saying that Boeing has since made “drastic” changes to its processes. “It’s critically important that we rebuild trust.”

The CEO was keen to put the focus on improving Boeing’s safety culture, saying that he won’t push for higher aircraft production rates until key safety metrics point in the right direction. He’s limited the financial guidance shared with investors, the CEO said, in a nod to criticism levied against past executives that their emphasis on generating cash and production rates pressured factory workers to downplay safety concerns.

“I’m not pressuring the team to go fast, I’m pressuring the team to do it right,” Ortberg said. “That’s the most important thing we can do at this point.”

The CEO said he “hopes” that Boeing can move the 737 Max aircraft above a rate of 38 a month later in the year.

Ortberg’s appearance was his first before U.S. lawmakers since he became CEO in August. He succeeded Dave Calhoun, who stepped down as part of a broader leadership shakeup. Calhoun faced searing criticism when he appeared before lawmakers last year, who accused the former CEO of putting profits ahead of safety. By contrast, the tone at the hearing with Ortberg was more measured and cordial.