Boeing Supplier Ignored Warnings Of “Excessive Amount Of Defects,” Former Employees Allege

Less than a month before a door plug blew out of a Boeing airliner last Friday, documents were filed in federal court alleging that former employees at the company’s subcontractor repeatedly warned management about safety problems and were told to falsify records. According to the federal complaint and corresponding internal corporate documents reviewed by The Lever, one employee allegedly told a colleague that “he believed it was just a matter of time until a major defect escaped to a customer.” Read more in today’s breaking report below.

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A gaping hole where a door plug blew out of a Boeing 737 Max 9 jetliner as it was departing Portland International Airport on Jan. 5, 2024. (National Transportation Safety Board via AP)

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Less than a month before a catastrophic aircraft failure prompted the grounding of more than 150 of Boeing’s commercial aircraft, documents were filed in federal court alleging that former employees at the company’s subcontractor repeatedly warned corporate officials about safety problems and were told to falsify records.

One of the employees at Spirit AeroSystems, which reportedly manufactured the door plug that blew out of an Alaska Airlines flight over Portland, Oregon, allegedly told company officials about an “excessive amount of defects,” according to the federal complaint and corresponding internal corporate documents reviewed by The Lever.  

According to the court documents, the employee told a colleague that “he believed it was just a matter of time until a major defect escaped to a customer.”

The allegations come from a federal securities lawsuit accusing Spirit of deliberately covering up systematic quality control problems, encouraging workers to undercount defects, and retaliating against those who raised safety concerns. Read the full complaint here.

Although the cause of the Boeing airplane’s failure is still unclear, some aviation experts say the allegations against Spirit are emblematic of how brand-name manufacturers’ practice of outsourcing aerospace construction has led to worrisome safety issues. 

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They argue that the Federal Aviation Administration (FAA) has failed to properly regulate companies like Spirit, which was given a $75 million public subsidy from Secretary Pete Buttigieg’s Transportation Department in 2021, reported more than $5 billion in revenues in 2022, and bills itself as “one of the world’s largest manufacturers of aerostructures for commercial airplanes.”

“The FAA’s chronic, systemic, and longtime funding gap is a key problem in having the staffing, resources, and travel budgets to provide proper oversight,” said William McGee, a senior fellow for aviation and travel at the American Economic Liberties Project, who has served on a panel advising the U.S. Transportation Department. “Ultimately, the FAA has failed to provide adequate policing of outsourced work, both at aircraft manufacturing facilities and at airline maintenance facilities.”

David Sidman, a spokesperson for Boeing, declined to comment on the allegations raised in the lawsuit. “We defer to Spirit for any comment,” he wrote in an email to The Lever.

Spirit AeroSystems did not respond to multiple requests for comment on the federal lawsuit’s allegations. The company has not yet filed a response to the complaint in court.

“At Spirit AeroSystems, our primary focus is the quality and product integrity of the aircraft structures we deliver,” the company said in a written statement after the Alaska Airlines episode.

The FAA did not immediately respond to a request for comment on its oversight of Spirit.

“Business Depends Largely On Sales Of Components For A Single Aircraft”

Spirit was established in 2005 as a spinoff company from Boeing. The publicly traded firm remains heavily reliant on Boeing, which has lobbied to delay federal safety mandates. According to Spirit’s own SEC filings, the company’s “business depends largely on sales of components for a single aircraft program, the B737,” the latest version of which — the 737 Max 9 — has now been temporarily grounded, pending inspections by operators.

Spirit and Boeing are closely intertwined. Spirit’s new CEO Patrick Shanahan was a Trump administration Pentagon official who previously worked at Boeing for more than 30 years, serving as the company’s VP of various programs, including supply chain and operations, all while the company reported lobbying federal officials on airline safety issues. Spirit’s senior vice president Terry George, in charge of operations engineering, tooling, and facilities, also previously served as Boeing’s manager on the 737 program.

Last week’s high-altitude debacle — which forced an Alaska Airlines 737 Max 9’s emergency landing in Portland — came just a few years after Spirit was named in FAA actions against Boeing. In 2019 and 2020, the agency alleged that Spirit delivered parts to Boeing that did not comply with safety standards, then “proposed that Boeing accept the parts as delivered” — and “Boeing subsequently presented [the parts] as ready for airworthiness certification” on hundreds of aircraft.

Then came the class-action lawsuit: In May 2023, a group of Spirit AeroSystems’ shareholders filed a complaint against the company, claiming it made misleading statements and withheld information about production troubles and quality control issues before media reports of the problems led to a major drop in Spirit’s market value. 

An amended version of the complaint, filed on Dec. 19, provides more expansive charges against the company, citing detailed accounts by former employees alleging extensive quality control problems at Spirit. 

Company executives “concealed from investors that Spirit suffered from widespread and sustained quality failures,” the complaint alleges. “These failures included defects such as the routine presence of foreign object debris in Spirit products, missing fasteners, peeling paint, and poor skin quality. Such constant quality failures resulted in part from Spirit’s culture which prioritized production numbers and short-term financial outcomes over product quality, and Spirit’s related failure to hire sufficient personnel to deliver quality products at the rates demanded by Spirit and its customers including Boeing.”

“We Are Being Asked To Purposely Record Inaccurate Information”

The court documents allege that on Feb. 22, 2022, one Spirit inspection worker explicitly told company management that he was being instructed to misrepresent the number of defects he was working on.

“You are asking us to record in a inaccurately [sic] way the number of defects,” he wrote in an email to a company official. “This make [sic] us and put us in a very uncomfortable situation.” 

The worker, who is unnamed in the federal court case, submitted an ethics complaint to the company detailing what had occurred, writing in it that the inspection team had “been put on [sic] a very unethical place,” and emphasizing the “excessive amount of defects” workers were encountering.

“We are being asked to purposely record inaccurate information,” the inspection worker wrote in the ethics complaint. 

He then sent an email to Spirit’s then-CEO, Tom Gentile, attaching the ethics complaint and detailing his concerns, saying it was his “last resort.” 

When the employee had first expressed concerns to his supervisor about the mandate, the supervisor responded “that if he refused to do as he was told, [the supervisor] would fire him on the spot,” the court documents allege.

After the worker sent the first email, he was allegedly demoted from his position by management, and the rest of the inspection team was told to continue using the new system of logging defects.

Ultimately, the worker’s complaint was sustained, and he was restored to his prior position with back pay, according to the complaint. He quit several months later, however, and claimed that other inspection team members he had worked with had been moved to new positions when, according to management, they documented “too many defects.”

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“Spirit Concealed The Defect”

In August 2023, news broke that Boeing had discovered a defect in its MAX 737s, delaying rollout of the 400 planes it had set to deliver this year. Spirit had incorrectly manufactured key equipment for the fuselage system, as the company acknowledged in a press statement. 

But these defects had been discovered by Spirit months before they became public, according to the December court filings.

The court documents claim that a former quality auditor with Spirit, Joshua Dean, identified the manufacturing defects — bulkhead holes that were improperly drilled — in October 2022, nearly a year before Boeing first said that the defect had been discovered. Dean identified the issue and sent his findings to supervisors on multiple occasions, telling management at one point that it was “the worst finding” he had encountered during his time as an auditor.

“The aft pressure bulkhead is a critical part of an airplane, which is necessary to maintain cabin pressure during flight,” the complaint says. “Dean reported this defect to multiple Spirit employees over a period of several months, including submitting formal written findings to his manager. However, Spirit concealed the defect.”

In April 2023, after Dean continued to raise concerns about the defects, Spirit fired him, the complaint says.

In October 2023, Boeing and Spirit announced they were expanding the scope of their inspections. The FAA has said it is monitoring the inspections, but said in October there was “no immediate safety concern” as a result of the bulkhead defects.

“Emphasis On Pushing Out Product Over Quality”

Workers cited in the federal complaint attributed the alleged problems at Spirit to a culture that prioritized moving products down the factory line as quickly as possible — at any cost. The company has been under pressure from Boeing to ramp up production, and in earnings calls, Spirit’s shareholders have pressed the company’s executives about its production rates. 

According to Financial Times, after the extended grounding of Boeing’s entire fleet of 737 Max airlines following two major crashes in 2018 and 2019, “the plane maker has sought to increase its output rate and gain back market share it lost to Airbus,” its European rival.

Spirit, which also produces airframe components for Airbus, has felt the pressure of that demand. As Shanahan noted in Spirit’s third-quarter earnings call on Nov. 1, “When you look at the demand for commercial airplanes, having two of the biggest customers in the world and not being able to satisfy the demand, it should command our full attention.” 

According to the court records, workers believed Spirit placed an “emphasis on pushing out product over quality.” Inspection workers were allegedly told to overlook defects on final walkthroughs, as Spirit “just wanted to ship its completed products as quickly as possible.”

Dean claimed to have noticed a significant deterioration in Spirit’s workforce after Spirit went through several rounds of mass layoffs in the early days of the COVID-19 pandemic, despite the huge influx in government funding they received. 

According to court documents, Dean said that “Spirit laid off or voluntarily retired a large number of senior engineers and mechanics, leaving a disproportionate number of new and less experienced personnel.”

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“Over-Tightening Or Under-Tightening That Could Threaten The Structural Integrity”

After the Alaska Airlines plane was grounded, United Airlines launched an independent inspection of their planes. Initial reporting shows that inspectors found multiple loose bolts throughout several Boeing 737 Max 9 planes. Alaska Airlines is currently conducting an audit of their aircraft.

Concerns about properly tightened equipment were detailed in the federal complaint.  

“Auditors repeatedly found torque wrenches in mechanics’ toolboxes that were not properly calibrated,” said the complaint, citing another former Spirit employee. “This was potentially a serious problem, as a torque wrench that is out of calibration may not torque fasteners to the correct levels, resulting in over-tightening or under-tightening that could threaten the structural integrity of the parts in question.”

According to former employees cited in the court documents, in a company-wide “toolbox audit,” more than 100 of up to 1,400 wrenches were found out of alignment. 

On Spirit’s November earnings call, after investors pressed the company’s new CEO about its quality-control problems, Shanahan promised that the company was working to fix the issues — and its reputation.

“The mindset I have is that we can be zero defects,” he said. “We can eliminate all defects. But every day, we have to put time and attention to that.”

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