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Boeing Faces New Regulatory Scrutiny


Questions continue to swirl around Boeing after two deadly plane crashes involving new 737 Max jets. This week, an Indonesian airline said it wants to cancel an order for dozens of planes from Boeing. A Senate subcommittee is planning to hold a hearing on the company next week. And Boeing is reportedly the focus of a Justice Department investigation, an unusual position for a company that ordinarily flexes a lot of political influence in Washington, D.C. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: Boeing has long enjoyed outsized influence in the nation's capital where the company spends millions of dollars on lobbying each year. And policymakers are well aware that Boeing employs more than 150,000 well-paid workers around the country. Air Force One is built by Boeing, and presidents from both parties have enthusiastically promoted the company's products. Even as he announced the grounding of the 737 Max jets last week, President Trump took pains to call Boeing an incredible company.


PRESIDENT DONALD TRUMP: It's also one of our largest exporters, one of our - you know, truly - one of the truly great companies of the world. They have to figure it out fast. They know that.

HORSLEY: A lot of people are trying to figure out fast what went wrong and allowed two Boeing jetliners to crash within five months of each other in what appear to be similar circumstances. Oregon Congressman Peter DeFazio, who chairs the House Transportation Committee, wants to know how the Federal Aviation Administration came to approve the new planes with a software feature that automatically points the jet's nose downward if a single sensor indicates it's climbing too sharply.

PETER DEFAZIO: Historically, Boeing let pilots fly the plane. That was a new addition. It certainly should have been highlighted and noted. And I believe it should require training.

HORSLEY: DeFazio says before the first crash last October, many pilots weren't even aware of the new software. He's also concerned that many 737 Max jets did not include a warning indicator to alert pilots that the critical sensor might be malfunctioning. Boeing offered such an indicator but only as an optional add-on.

DEFAZIO: That would be like selling me a car that doesn't have either a gauge or a red light to tell me the engine's overheating, and you just drive it until it blows up. That doesn't make sense to me.

HORSLEY: Boeing says it's absolutely committed to aircraft safety and working cooperatively with the various investigations. The company says it will soon release an update to the software feature, which is suspected of contributing to at least one and, perhaps, both deadly crashes.

The Seattle Times reported this week that much of the work of certifying the new planes was carried out not by the FAA but by Boeing's own employees. DeFazio says he's worried for years about delegating that kind of authority to the company. Mike Perrone, who leads a union representing FAA employees, says the agency needs to invest more in its own inspectors.

MIKE PERRONE: Our position is the inspectors should be out there visiting the facilities, doing what they used to do many, many years ago, staying a little bit back from being, I'll say, cozy with the industry to be in the regulatory side.

HORSLEY: After the second crash two weeks ago, the FAA was slow to ground the 737 Max, acting only after nearly every other country had already done so. The agency says it was waiting for evidence that would tie the two crashes together. The acting head of the FAA used to work for Boeing's trade association.

Acting Defense Secretary Patrick Shanahan was also a longtime Boeing executive, and the Pentagon's inspector general is now investigating whether Shanahan violated ethics rules by promoting Boeing as a defense contractor while disparaging its rivals. Shanahan says he welcomes that probe. Ordinarily, an ethics investigation would be pretty much below the radar. But in the current environment, everything connected to Boeing is under a powerful microscope. Congressman DeFazio says the jet-maker and its U.S. regulators still have an outstanding safety record, but he sees an opportunity to make them even safer. Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.