Following are extensively edited excerpts from
a current NPR report:
A quality-control inspector working at a key supplier for Boeing's 737 Max plane reported finding an "excessive amount of defects" at a plant in Kansas, according to documents filed in federal court last month. The allegations add to the scrutiny of Spirit AeroSystems, which made the fuselage and the door plug that blew out of the side of an Alaska Airlines 737 Max 9.
Spirit's customers include both the EU-based Airbus and Boeing, but the company has longstanding ties to Boeing: Spirit was spun off from the U.S. aircraft maker in 2005, and in 2020 it said the 737 Max accounted for more than 50% of its annual revenue. But Spirit has faced a string of challenges in recent years, and last November the company reported a net loss of $691.6 million in the first three quarters of 2023. It also said it was $3.87 billion in debt.
As concern over defects grew last fall, Spirit replaced CEO Tom Gentile — who is named in the shareholder lawsuit — with former Boeing executive Pat Shanahan. Boeing and Spirit also announced an agreement to try to boost both production and quality.
The court documents were filed as part of an ongoing lawsuit by shareholders who accuse Spirit's leaders of mismanaging the company and misrepresenting details about its operations — resulting, the plaintiffs say, in sharp declines in Spirit's stock value. News of the lawsuit was first reported by The Lever.
The court filings allege that a former Spirit employee was asked to perform his duties in an "unethical" way that was meant to obscure quality problems. He also accuses Spirit managers of retaliating against him for raising a red flag about the way defects were reported by demoting him.
The former Spirit employee is described as a 12-year veteran of the company, a "quality manager" who worked as an inspector and then led a team of inspectors. The suit says he "oversaw various processes at the 'end of the line,' where Spirit finished working on products before shipping them to customers."
"This included preparation for completed fuselages to be shipped to Boeing, and oversight for the 'final shake,' which is what Spirit called its final inspection before shipment," the lawsuit states.The suit focuses on how executives allegedly handled a problem: Spirit had misdrilled holes on part of some 737 Max planes: their aft pressure bulkhead, a critical piece of the structure around the cabin. The plaintiffs say that in October 2022 a quality auditor at Spirit had identified the bulkhead problem as a significant defect and reported it to managers in several departments.
"However," the suit alleges, "Spirit concealed this issue from investors until it was revealed by independent reporting in August 2023, ten months after Spirit had identified it."
That problem became public knowledge as Spirit was already dealing with another issue: Last April, Boeing revealed a defect in the way tail fin fittings were joined to the aft fuselage on some models of the 737 Max, resulting in a production slowdown.
The shareholders' lawsuit notes that when the problems became public knowledge, stock prices for both Spirit and Boeing sank.
Comments
And there are still people who still assert that we all should just trust Big Money to police themselves.