Boeing agrees to FAA settlement to improve compliance

Boeing (BA) has agreed to spend $12 million to improve its auditing and quality certification procedures in a five-year settlement with the Federal Aviation Administration following regulatory pressure over compliance issues.

The manufacturing giant had faced scrutiny from federal regulators over the extra time it took to provide information about the installation of equipment that would reduce the likelihood of a fuel tank fire in Boeing 747 and 757 aircraft.

FAA regulators had also examined what it described as "the company's insufficient corrective action after discovering that a supplier had been providing incorrectly shaped fasteners."

While noting that it did not accuse Boeing of fostering unsafe conditions, the agency said it could fine Boeing up to $24 million over the next five years if the company does not implement the terms of the settlement.

"It is imperative that everyone complies with our aviation system’s high safety standards," U.S. Transportation Secretary Anthony Foxx said in a statement. "This agreement is an important step toward ensuring that Boeing fully meets all applicable compliance standards going forward."

Boeing said the deal "fairly resolves" the "potential civil penalty actions" it faced amid regulatory oversight. The company said it has already implemented some of the changes it agreed to.

"As a company we take responsibility for our actions, and we will never compromise on our commitment to quality and compliance — a commitment that is one of the core reasons we build the best airplanes in the world," the company said. "We are actively working on the areas identified in the agreement and see this as another way to continually improve our compliance system."

Among the steps Boeing agreed to beginning Jan. 1:

--Use FAA's safety analysis modeling system to analyze compliance matters and ensure managers are given responsibility for addressing the issues.

--Require quality audits in all departments and locations.

--Examine supplier quality through a fresh round of audits.

--Increase FAA reporting frequency on regulatory compliance improvements.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.