Boeing CEO Calhoun heads to Senate hours after new whistleblower claims

Boeing CEO Dave Calhoun plans to tell a Senate panel on Tuesday that the company’s culture is “far from perfect” as fresh whistleblower claims surface just hours before the hearing that allege the company mishandled hundreds of defective parts.

Calhoun, who has said he will step down before the end of the year, faces questions from the Senate Permanent Subcommittee on Investigations as the company works to improve employee training and aircraft quality and to fix its tarnished safety reputation. The company has still not named a replacement for Calhoun, who took over after its previous leader was ousted for his handling of two fatal Boeing crashes.

“Much has been said about Boeing’s culture. We’ve heard those concerns loud and clear. Our culture is far from perfect, but we are taking action and making progress,” Calhoun plans to tell the subcommittee, according to written testimony ahead of the hearing.

The subcommittee released whistleblower claims on Tuesday from Sam Mohawk, a quality assurance investigator at Boeing, alleging the company lost track of parts that were damaged or not up to specification and that “those parts are likely being installed on airplanes.” The parts Mohawk flagged were in Boeing’s Renton, Washington, plant, where the company makes its best-selling 737 Max.

Mohawk said he was retaliated against and that he was told by supervisors to hide evidence from the Federal Aviation Administration, according to a memo shared by the committee on Tuesday. Dozens of important parts were stored outside during an FAA inspection, including 42 rudders as well as winglets and stabilizers, Mohawk alleged in claims with the Occupational Safety and Health Administration, the memo said.

A Boeing spokeswoman said that the company received the claims Monday night and that staff are reviewing them.

“We continuously encourage employees to report all concerns as our priority is to ensure the safety grof our airplanes and the flying public,” she said.

The FAA said it has seen an increase in the number of reports from Boeing staff since the door-plug blowout in January.

“We thoroughly investigate every report, including allegations uncovered in the Senate’s work,” the agency said Tuesday. The FAA declined to comment on the specifics of the latest allegations.

Mohawk is not testifying before the Senate subcommittee’s hearing, which starts at 2 p.m. ET.

The hearing and new whistleblower claims are further complicating matters for Boeing. The company already faces potential U.S. prosecution after the Justice Department said last month that the plane-maker violated a 2021 settlement tied to 737 Max crashes in 2018 and 2019 that claimed 346 lives. That agreement, which protected the company and its executives from facing criminal charges tied to the crashes, would have expired just days after the blowout of the Alaska Airlines door panel in January. The Justice Department has until July 7 to decide whether to prosecute.

Several victims’ family members are expected to attend Tuesday’s hearing. Relatives of Max crash victims met with Justice Department officials late last month to urge the U.S. to prosecute.

“Boeing made a promise to overhaul its safety practices and culture. That promise proved empty, and the American people deserve an explanation,” said Sen. Richard Blumenthal, D-Conn., the subcommittee’s chairman, upon announcing the hearing earlier this month.

The FAA has taken a hard line against Boeing, with FAA Administrator Mike Whitaker saying the regulator will keep inspectors on the ground at the company’s facilities until the agency is satisfied with safety improvements.

The FAA had already halted Boeing’s ability to increase production of the Max, its bestselling plane. Whitaker last month said it would likely be several months before lifting that restriction.

Boeing’s aircraft output has suffered from the resulting crisis, forcing big customers such as Southwest Airlines and United Airlines to adjust their growth and hiring plans.

Boeing’s lower production and deliveries have hurt its cash flow, and the company warned investors last month that it would burn instead of generate cash this year.

Boeing’s shares are down more than 30% so far this year as of Monday’s close, compared with a nearly 15% gain in the S&P 500.

The company is trying to stamp out quality flaws on jets and reduce so-called traveled work in which production steps are completed out of order, something it has done to address defects. Last month Boeing pointed to a host of other changes to encourage workers to speak up about problems in its factories after several whistleblowers raised concerns about quality issues and retaliation.

Separately, Boeing is facing supply chain issues. Spirit AeroSystems, a major supplier for both Boeing and Airbus, said last week that titanium entered the supply chain with falsified documents. The supplier said that despite the falsified documentation, more than 1,000 tests confirmed that the material is “airplane-grade titanium.”

Boeing has been trying to purchase fuselage supplier Spirit, a deal Calhoun said is “more than likely” to be finalized in the first half of the year.