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'We know we made mistakes': Boeing CEO to face the Senate $BA

Boeing Co Chief Executive Dennis Muilenburg speaks during a news conference at the annual shareholder meeting in Chicago, Illinois, U.S., April 29, 2019. Jim Young/Pool via REUTERS

On Tuesday, the one-year anniversary of the crash of Lion Air Flight 610, the first of two fatal crashes of Boeing’s 737 Max, Boeing (BA) CEO Dennis Muilenburg is scheduled to testify before the Senate Commerce Committee, Science, and Transportation concerning the company’s design, development, and certification of the aircraft.
It’s one of two scheduled Congressional public hearings this week where Muilenburg will be in the in the hot seat. On Wednesday, members of the House of Representatives Transportation and Infrastructure Committee are scheduled to hold a hearing to question the CEO. Muilenburg previously turned down the House Committee’s earlier invitation to testify.
“We know we made mistakes and got some things wrong. We own that, and we are fixing them. We have developed improvements to the 737 MAX to ensure that accidents like these never happen again,” Muilenburg is expected to say, according to remarks prepared ahead of Tuesday’s hearing.
John Hamilton, Vice President and Chief Engineer for Boeing’s Commercial Airplanes, who served as the company’s President of Engineering at the time of the crashes, is also slated to testify during both hearings.

‘Erroneous signals’

Mulienburg will be tasked with balancing testimony that assures global regulators, victims’ families, its customers, and the flying public that the company’s proposed Max changes are aggressive enough to avoid future risks associated with the aircraft’s design, yet insignificant enough to trigger the imposition of additional liability on the company. Lawmakers are reportedly prepared to question whether Boeing was aware of risks associated with the Max’s Maneuvering Characteristics Augmentation System, or MCAS system. They will also ask whether employees felt pressure to skirt safety enhancements in efforts to get the plane to market quickly.
“We know that both accidents involved the repeated activation of a flight control software function called MCAS, which responded to erroneous signals from a sensor that measures the airplane’s angle of attack,” Muilenburg’s prepared remarks say.

Aerial photos showing Boeing 737 Max airplanes parked at Boeing Field in Seattle, Washington, U.S. October 20, 2019. Picture taken October 20, 2019. REUTERS/Gary He

Lawmakers questioning the executives will be armed with recently released investigative reports issued by U.S. and international regulators. The reports place varying degrees of fault on the plane manufacturer.
Indonesian officials who examined the Lion Air crash placed blame Boeing, the F.A.A., and a Florida-based parts supplier, as well as Lion Air flight and maintenance crews. A group of international regulators from the U.S., Canada, the European Union, Australia, Japan, Brazil, Singapore, China, Indonesia, and United Arab Emirates, tasked with examining only the Federal Aviation Administration’s (FAA) certification process, concluded the process should ensure fail-safe design principles that minimize reliance on pilot action as a primary means of risk mitigation. The National Transportation Safety Board (NTSB) found that the accident pilots’ responses to MCAS were inconsistent with Boeing’s assumptions, and recommended tools to effectively alert pilots to airplane failures to improve response timeliness.
FAA guidance allows such assumptions to be made in certification analyses without providing clear direction about the consideration of multiple flight-deck alerts and indications in evaluating pilot recognition and response. The NTSB’s report states that more robust tools and methods need to be used for validating assumptions about pilot response to airplane failures in safety assessments developed as part of the U.S. design certification process.

‘A race to the bottom’

Former cockpit designer, NTSB investigator, and F.A.A. Human Performance Program Scientist, Dr. Alan Diehl, told Yahoo Finance the certification process started to decline in effectiveness 40 years ago when Congress deregulated the airline industry.
“In 1978, the Congress in this country deregulated the airlines, and what that meant was that fairly quickly, people who were going to be in the business, whether it was the airlines or the manufacturers, realized that was going to be a bottom line endeavor,” Diehl told Yahoo Finance. “This was a race to the bottom to try to deliver the cheapest products and services that we can.”
One of the first things that happened under deregulation, Diehl said, was to promote automation systems that would permit the operation of heavier aircraft with two, rather than three, pilots. To save on costs, automation became increasingly important to manufacturers so that cockpits could be designed to eliminate the flight engineer, or third pilot, he said. A commission to study the issue, empaneled by President Ronald Reagan, published findings concluding that two-pilot cockpits were as safe as those with three.
“Automation can be very beneficial from a safety standpoint, but you know it's a two edged sword,” Diehl said. “You need to be very careful to examine both the system safety issues, and ergonomic issues when we're certifying these aircraft.”

As a result of the 737 Max crashes, Boeing agreed to modify all Max planes in order to change the way its MCAS operates. During the two fatal flights the system processed and acted upon errant sensor data, that in turn automatically pushed the nose of the plane down. The system was installed on the Max to prevent engine stalls. In theory, the system would counteract a change in the plane’s center of gravity caused by Boeing’s decision to design the plane with larger engines placed farther forward on the fuselage than on previous 737s. The system was activated in both the Lion Air crash as well as the crash of Ethiopian Airlines Flight 302, approximately five months later.
Boeing said to date it had flown more than 814 test flights with the updated software, and conducted “numerous” simulator sessions with 545 participants from 99 customers and 41 global regulators.
Max planes were grounded by the FAA on March 13 following an Ethiopian Airlines crash. Shortly after takeoff from Jakarta, Indonesia, on October 29, Lion Air Flight 610 crashed into the Java Sea. Ethiopian Airlines Flight 302 crashed shortly after takeoff from Addis Ababa, Ethiopia, on March 10.
In a press release on Monday, Boeing said it had made “robust” improvements to the Max flight control software, including a system that will now compare information from two, rather than one sensor, before activating, and activate only once, and only when both sensors agree. In addition, an override of MCAS will occur when a pilot takes control.
“These changes will prevent the flight control conditions that occurred on the Lion Air 610 and Ethiopian Airlines 302 flights from ever happening again,” the company said in a press release Monday. On its website Tuesday, Boeing recognized the Lion Air crash anniversary and the Ethiopian crash. “We mourn those whose lives were lost on Lion Air Flight 610 and Ethiopian Airlines Flight 302 and offer our deepest sympathies to their families and friends. We will always remember,” Boeing stated.
Boeing has continued to express its target date for returning the Max to service by the end of the year. However, all U.S. airlines have either pushed their scheduled Max service into 2020, or declined to commit to a date.
In its third quarter earnings for the period ending September 30, Boeing reported the accumulation of an additional $900 million in costs due to grounding of the aircraft. The Max has been grounded worldwide since March 13. The added expense brought Boeing’s total costs associated with the grounding to $9.2 billion.

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