▶ 0:21:39Chair Cruz: Good morning. Before we discuss today's hearing, I want to touch on a separate aviation matter. Last week, this committee held a hearing on the january 29 dca midair collision. Brigadier general matthew bremen, the director of the army aviation, appeared on behalf of the army.
▶ 0:22:03Chair Cruz: At the hearing, both ranking member cantwell and I requested an army memo outlining its standard operating procedures for when army helicopters could forgo broadcasting their locations and altitudes while flying near dca airport. The army had earlier refused to provide the memo to my staff, despite being allowed to do so by the independent crash investigator, the ntsb.
▶ 0:22:35Chair Cruz: Given the opportunity to be transparent, the army again refused to commit to providing the memo, which is entitled automatic dependent broadcast surveillance out off operations in the national airspace. Ranking member cantwell and I follow the hearing with a joint letter explicitly requesting the unredacted memo.
▶ 0:23:02Chair Cruz: Now, for the third time, we made clear to the general that he had 24 hours to provide that memo or there would be real consequences. It has now been five days since the hearing, and the army has still not provided the memo.
▶ 0:23:19Chair Cruz: It begs the question, what doesn't the army want congress or the american people to know about why it was flying partially blind to the other aircraft and the air traffic controllers near dca? This is not acceptable.
▶ 0:23:38Chair Cruz: I fully expect that, should the army continue to refuse to provide the internal memo, this committee will exercise its full authorities to compel its production. Events that have transpired since the january crash underscore the precarious situation in the nation's airspace.
▶ 0:24:02Chair Cruz: Last friday, after the hearing, three flights were cleared for takeoff at dca, while a military flyover was approaching arlington national cemetery. The U.S. air force t-38 came within half a nautical mile of lateral separation and as close as 200 feet of vertical separation from a delta aircraft departing dca for minneapolis.
▶ 0:24:34Chair Cruz: The delta flight's tcas sounded a resolution advisory alerting the pilots to a traffic collision and directing them to continue upwards to avoid a collision. This is far too close. Seconds away from yet another disaster. The air-traffic center that controls airspace around D.C. notified dca about the flyover.
▶ 0:25:03Chair Cruz: That should have led to halted traffic. This serious communication breakdown is just the latest in a string of missteps that signal the air-traffic organization is under extreme stress.
▶ 0:25:17Chair Cruz: It is my expectation that all federal actors, when involved in any incident in the national airspace, will be forthcoming when this committee conducts its oversight to ensure flying remains the safest mode of transportation. I want to be explicit to the army.
▶ 0:25:41Chair Cruz: Every one of us supports a strong national defense, but the army does not have at its option ignoring the united states senate. If there is another accident, if another black hawk helicopter strikes another passenger jet and murder 67 people because the army refused to change its policy of turning off adsb out, and rather than
▶ 0:26:15Chair Cruz: Act proactively the army chose to protect its bureaucratic ass, those deaths will be on the army's hands. None of us want that to happen. The responsible decision for the army to make is to provide that memo to this committee today.
▶ 0:26:37Chair Cruz: Again, if the army continues to stonewall they will face a subpoena from this committee. That brings us to today's hearing. It is essential for members of this committee to hear directly from boeing about its manufacturing challenges.
▶ 0:27:04Chair Cruz: I'm glad the ceo, kelly ortberg, is here today and here voluntarily. Ms. ortberg, welcome, and thank you for testifying. For over a century boeing has been building aircraft in america, beginning with the boeing model one seaplane in 1916, william boeing built a company that became a household name. As the first world war broke out, the boeing airplane company began building aircraft for the U.S. navy.
▶ 0:27:38Chair Cruz: By 1919, boeing's first aircraft design for commercial purposes took flight. Throughout its storied history, boeing aircraft has been synonymous with excellence, quality, and safety in flight. That was until october 2018 when a 737 max 8 aircraft operated by lion air crashed into the
▶ 0:28:08Chair Cruz: Java sea killing 189 people. Five months later, ethiopian flight 302 would crash just after takeoff, killing 157 passengers and crew. We hundred 46 souls -- 346 souls gone in an instant. Family members of those killed have since become tireless advocates for aviation safety.
▶ 0:28:32Chair Cruz: I welcome those family members who are in attendance today and conveyed my continued condolences for your loss and express my gratitude for your leadership. Thank you for turning your grief into advocacy. The max 8's were grounded soon after the second crash. For more than 18 months in the U.S.
▶ 0:28:59Chair Cruz: As boeing worked with the faa on a software fix to prevent the technological breakdown that contributed to both crashes. I was among the first and to publicly call for grounding the plane, days after the second crash. When the max returned to the air in late 2020, many hoped that the worst was behind boeing.
▶ 0:29:21Chair Cruz: But then, on january 5, 2024 alaska airlines flight 1282 the parted portland international airport on route to ontario, california. Approximately 10 minutes into the flight the mid-cabin exit door plug, a section of the fuselage built to seal off unused emergency exits, fell off of the plane leading to rapid depressurization of the cabin.
▶ 0:29:51Chair Cruz: Oxygen masks dropped and belongings were sucked out of the gaping hole. The national transportation safety board's review found that boeing failed to include at least three of the four bolts needed to properly secure the door plug to the fuselage. Thankfully, and miraculously, no lives were lost.
▶ 0:30:16Chair Cruz: The incident produced fresh doubt about boeing's ability to safely build planes. Repeated worries about production issues at boeing and its subcontractors has led many to question the company's ability to design and manufacture safety aircraft -- safe aircraft. Efforts to cut corners in production or move the next production phase before necessary.
▶ 0:30:43Chair Cruz: Parts have led to unexceptional failures. Inefficient oversight of third party suppliers and auditing procedures created an unsustainable lack of safety culture at boeing. Since the alaska airlines 1282 incident, boeing says that it is working hard to address those concerns.
▶ 0:31:08Chair Cruz: Including by developing a plan under faa oversight for renewed safety and quality in production processes. Speak up program to allow employees to anonymously submit a concern when something seems to be going wrong. The culture will change overnight. Boeing must continue to work with the faa to bring safety and quality fully back to its production process.
▶ 0:31:38Chair Cruz: The faa has been evaluating key production indicators, kpis, to track boeing's progress on key metrics. From discussions with the faa and boeing, I am told that the company is progressing well and is on track to simplify needlessly complex processes, identify points of weakness, reduce deficiencies, and ultimately improve safety. These conversations alone will not be the proper reassurance.
▶ 0:32:11Chair Cruz: This committee today wants to hear what specific and concrete actions boeing has taken to fix the problems. How is boeing progressing in its kpis? What changes has it implemented to ensure a strong safety culture? How is boeing adapting its quality management system?
▶ 0:32:36Chair Cruz: We want to hear these answers not only from the company's ceos, but from the company's managers, engineers, and machinists. I know that the workers at boeing desperately want their company to succeed too. So, to those at boeing facilities who are watching, consider my door open to hearing directly from you how you believe boeing is turning a corner and fixing what went wrong.
▶ 0:33:04Chair Cruz: President trump is taking great strides to bring back american manufacturing. I very much hope that boeing is part of that renaissance. I want boeing to remain a beacon of american excellence in manufacturing. Our country is better off economically. Our aviation system is safer. Our nation is stronger when boeing is stronger.
▶ 0:33:34Chair Cruz: I'm going to turn to ranking member cantwell for her opening statement. The committee will come to order. The committee will come to order and you will be removed if you disrupt the proceedings again.
▶ 0:33:51Sen. Cantwell: Mr. chairman, before we begin on the point of today's hearing, I want to join you in our request to ask the department of defense to give us information regarding the adbs issue and the recent near collision, but also the tragic accident that happened with a
▶ 0:34:21Sen. Cantwell: Cr j and black hawk helicopter. The fact that the military asked for an exemption in the granting of that exemption with the faa made it seem as if that was going to be a rare exemption only used infrequently, only later to find out that it had issued a statement to congresswoman from the D.C.
▶ 0:34:44Sen. Cantwell: Area , norton, that it was basically turning off ads-b 100% of the time. I think the faa acting administrator shed some light on this but not enough. I agree that we need to have the answers, information that has been presented to the national transportation safety board.
▶ 0:35:14Sen. Cantwell: That information has to inform us as to this interaction between transportation corridors that are vital to protect for the public safety and what the department of defense is using the D.C. ae the D.C. a airspace for today -- using the D.C. airspace for today and what are those safeguards. I look forward to getting the answers that we need from the air force.
▶ 0:35:42Sen. Cantwell: Thank you for holding this important hearing. Welcome, Ms. ortberg, for being here. I want to acknowledge the families who are here. As the chairman said, you've been playing a critical role in aviation safety. They have channeled their unimaginable grief into very positive, purposeful actions for the flying public.
▶ 0:36:07Sen. Cantwell: I also want to acknowledge the brave whistleblowers who have come forward at great personal risk to themselves to speak about the truth on quality and safety that are so important and instrumental. I know the families are very worried about the company's renegotiation of an agreement and the corporate monitoring. Maybe we will have a chance to talk about that today. We are here today, Mr.
▶ 0:36:31Sen. Cantwell: Orthberg to see if boeing and your leadership are making the fundamental changes we would like to see to turn the trust in the boeing company to the iconic manufacturer. I think that for many decades, as the chairman mentioned, thank you for mentioning all of the history that includes much success in the state of washington, the company was the pinnacle of manufacturing success.
▶ 0:37:00Sen. Cantwell: We shouldn't forget that that success is also critical to our national security, our economy. The company employs over 67,000 people in the state of washington. I think the whole supply chain is over 130,000 people. And contribute $79 billion to the american economy. Boeing remains the largest exporter -- and I can assure you that I believe in more exports. I would like to see a brighter future for boeing.
▶ 0:37:30Sen. Cantwell: Recently met with the university of washington, and Mr. ortberg, in many parts of our aviation supply chain, to understand how a tech hub can take us in a manufacturing production to a higher rate of production. This, I believe, is so important. What we are trying to understand is getting rid of safety inspectors is no trade-off, when in reality aviation innovation can help us with both quality and safety.
▶ 0:37:59Sen. Cantwell: However, the company must address these manufacturing quality issues, as the chairman mentioned. Two 737 max jet crashes killed over 300 people and the alaska door plug last year. We know the max because of a shortcut in safety cost $35 billion to the company.
▶ 0:38:25Sen. Cantwell: The door incident and the financial cost to that are just not good business, but we owe it to the families today to make sure that we are implementing the changes necessary to make sure that we are the leaders in aviation safety. I believe that starts with a robust safety management system, and that is what our expert panel found.
▶ 0:38:53Sen. Cantwell: A requirement from our safety bill to listen to nasa and other industry leaders about what would help us in our safety culture. They basically said that these were the important elements of a mandatory safety management system. Today, Mr. ortberg, I will be asking you about that.
▶ 0:39:15Sen. Cantwell: I know the reputation of the company in the past has been about instituting safety. When we passed the aviation safety bill in 2020 the law put the faa back in charge of approving unit members and restricting the faa from delegating critical tasks relating to critical design features.
▶ 0:39:44Sen. Cantwell: I want to ask you about that today and how if the company had a safety management system yet we still saw the problems of the door plug and other issues, so, these issues about inspector staffing models, service difficulty reports, whistleblower retaliation are all issues I hope we addressed today at this hearing.
▶ 0:40:13Sen. Cantwell: This country needs a strong the faa to do its oversight job. The boeing organizational design authorization expiring soon will need to be reauthorized. Will need to be pushed through by the faa.
▶ 0:40:32Sen. Cantwell: The last federal aviation administration boeing safety administration oversight office leader decided to give an extension for three years, hoping that boeing would make and show progress on that oversight authority before issuing a longer oda. We would love to hear about that today, whether the standards laid out in the oversight are being met at the boeing company.
▶ 0:41:01Sen. Cantwell: The faa needs to continue to play that strong role and keep pace with technology. If the faa, and nasa could play a larger role in helping on technology, but the department of transportation inspector general identified 16 weaknesses in the faa oversight of the boeing quality management, concluding that the faa was "not effective at identifying and
▶ 0:41:33Sen. Cantwell: Resolving production issues." this was despite conducting over 300 audits at boeing in a three-year period of time. Yet, the faa was not able to detect these critical manufacturing deficits.
▶ 0:41:50Sen. Cantwell: The issue of the verification optimization program that was to literally replace quality inspectors with mechanic self-inspection I think was the wrong approach in the air-worthiness standards for the air seven and max 10.
▶ 0:42:16Sen. Cantwell: Instead of the design fixes, there were many issues that the inspector general found were shortcomings. So, we as a nation want to be the leader in aviation we have to be the leader in aviation safety. Mr. ortberg, you need to channel bill boeing. You need to change the safety culture at boeing and we are glad you did that by starting your tenure in seattle. That matters.
▶ 0:42:45Sen. Cantwell: That oversight matters in helping us resume the leadership position in aviation. I look forward to your testimony this morning. Those critical steps that the company is taking to restore the safety culture and the manufacturing excellence so our country can again be the leader in aviation and aviation safety. Thank you, Mr. chairman.
▶ 0:43:07Chair Cruz: Thank you, ranking member cantwell. Joining us is Mr. kelly ortberg, the president and executive officer of the boeing company. Mr. ortberg joined boeing in this role in august of 2024, bringing with him over 35 years of experience in the aerospace industry. Mr. ortberg, you are recognized for your opening statement.
▶ 0:43:29Mr. Ortberg: Thank you, chairman cruz, ranking member cantwell, members of the committee, for inviting me to testify and your willingness to work with us as we make fundamental changes to our company to restore trust and return the boeing company to the american manufacturer that used to be.
▶ 0:43:49Mr. Ortberg: Since joining boeing over six month ago, I've appreciated the opportunity to hear from many of you, and I am committed to continue to work transparently with our regulators and congress. Last month, on march 10, marks the sixth anniversary of the tragic loss of passengers and crew members on ethiopian airlines flight 302. I know many victims' family members, as well as those from lion air flight 610 are here today.
▶ 0:44:18Mr. Ortberg: I want to extend my personal condolences for the painful loss of their loved ones on our aircraft and offer my pledge to make the necessary changes so that this never happens again. Boeing made serious missteps in recent years and it is unacceptable. In response, we have made sweeping changes to the people, processes, and overall structure of our company.
▶ 0:44:44Mr. Ortberg: While there is still work ahead, these profound changes are underpinned by deep commitment from all of us to the safety of our products and services. This commitment to aviation goes well beyond boeing. We play a crucial role in the U.S. economy and national security as evidenced by the U.S. air force recent selection of boeing to build the first sixth generation fighter jet.
▶ 0:45:10Mr. Ortberg: As the nation's largest exporter, boeing helped support nearly 1.8 million american jobs and contribute 84 billion dollars annually to the U.S. economy. It all depends on us getting this right. I appreciate the opportunity today to provide the committee with an update on the actions that we are taking to strengthen our commitment to safety-focused quality-driven culture. The results that we are seeing.
▶ 0:45:38Mr. Ortberg: And the ongoing work that we are doing, which is fundamental to our leadership in aerospace. For over a year we have been working with the faa on implementing recommendations from the expert review panel which this committee was instrumental in creating.
▶ 0:45:57Mr. Ortberg: Boeing is implementing a robust safety management system, a framework built on proven aviation industry best practices, to proactively identify and manage safety risks that may impact our commercial and defense products. We submitted our plan to the faa ahead of schedule, and we have a strategy to fully implement well ahead of the required deadline.
▶ 0:46:21Mr. Ortberg: Over dutch under the close oversight of the faa, we are implementing our control and quality plans and directly addressing findings from the faa special audit with a focus on four major work areas, including reducing defects, enhancing employee training, simplifying processes and procedures, and elevating our safety and quality culture.
▶ 0:46:51Mr. Ortberg: Many aspects of this plan came from our employees who generated over 26,000 improvement ideas, which we continue to evaluate and implement in support of strengthening our safety and quality. The impact of our efforts are already evident to our airline customers based on their feedback about the improved quality of our aircraft. Culture is perhaps the most predominant change we are making as a company.
▶ 0:47:18Mr. Ortberg: We are aligning our culture and incentives with the values that safety, quality, integrity. It starts with our leadership, including me, spending more time listening and learning from our employees, working to restore trust, and holding leadership accountable. I moved to seattle because I believed that our leadership needs to get closer to the people designing and building the aircrafts.
▶ 0:47:45Mr. Ortberg: As part of boeing's future, we took actions in recent months to improve our financial position and completed contract negotiations with our union production workforce in washington and oregon. We also expect to finalize the acquisition of spirit aerosystems later this year, which is key to delivering for our commercial and defense customers and will help improve our overall quality and performance.
▶ 0:48:14Mr. Ortberg: I have confidence in our plan, because I believe in the dedication of more than 160,000 employees, 85% of whom are based in the U.S., and nearly 10,000 suppliers across the country. No one is more committed to our company turnaround than our team. Working together, we are focused on connecting the world, protecting our freedoms, and supporting our economy.
▶ 0:48:41Mr. Ortberg: In closing, I want to reiterate my thanks to chairman cruz, ranking member cantwell, and members of the committee, and I look forward to taking your questions.
▶ 0:48:48Chair Cruz: Thank you, Mr. ortberg. Let me start with a simple question. Can travelers trust boeing? 346 people died in the two 737 max eight crashes. We are extremely fortunate that no one died in the door plug incident. Since 2018, boeing's mistakes have caused many people to question whether boeing is still capable of making safe aircraft.
▶ 0:49:19Chair Cruz: Mr. ortberg, what can you say to the millions who will board a boeing plane this year, who will put their children on the plane? I and I suspect every member of this panel fly boeing planes every week. What will you say to the public about why they should trust a boeing plane is safe?
▶ 0:49:41Mr. Ortberg: Senator, the boeing aircraft, 737 max 8 airplanes safely take off and land every 2 seconds of the day. I'm not denying the horrible incidents that you outlined. We need to take immediate action and are taking immediate action to make sure that those accidents never happen again.
▶ 0:50:10Mr. Ortberg: My family flies on those aircraft as well, and it is critically important that we rebuilt trust. The only way that we will do that is by building high quality airplanes, having the metrics show that we are making improvements, and I want everyone to know the entire boeing team is committed to building the highest quality aircraft in the world.
▶ 0:50:37Mr. Ortberg: Aircraft is the safest mode of transportation and we need to continue that, continue to find and learn if there are incidences so that these don't turn into tragic accidents in the future.
▶ 0:50:48Chair Cruz: I mention the ntsb's investigation of the alaska airlines door plug incident revealed that it was caused by manufacturing errors at boeing. Mr. ortberg, you joined boeing more than seven months after the door plug incident. What went wrong with the door plug and what specifically has boeing done to correct this safety lapse?
▶ 0:51:19Mr. Ortberg: Senator, first of all it is unacceptable that an aircraft left our factory without that door plug properly installed. Let me make that perfectly clear . That can never, never happen again. One thing that is currently in the ntsb investigation is we are not waiting for the ntsb to finish their investigation. We have taken immediate action. One of the first was to work with our airline customers and the faa to inspect all of the aircraft in the field.
▶ 0:51:45Mr. Ortberg: We have done that and ensure that there are no other incidences of a door plug not being installed properly in the field. The second thing that we did is, we found the proper paperwork was not completed when the door plug was removed in our factory. We have gone through extensive retraining of our workforce to make sure that they understand that that violated our policy and that they have to complete the proper paperwork.
▶ 0:52:14Mr. Ortberg: We have eliminated -- reduced the number of people who can actually do the modifications for the door plug so that in the future we have fewer people who are allowed to even touch and remove the door plugs.
▶ 0:52:30Mr. Ortberg: In addition, one of the contributing factors is we identified that the door plug needed to be removed in order to do repairs on the aircraft that were the result of defects in the fuselage. The defects come from the fuselage supplier, spirit aerosystems.
▶ 0:52:53Mr. Ortberg: The airplane moved down our factory line too far after we identified those defects, which contributed to the risk of the door plug not being properly installed. So, we have made changes to our process, pushed all of those defects back up to spirit aerosystems so we are not bringing those into our factories.
▶ 0:53:17Mr. Ortberg: So far, we have seen a 56% reduction in defects coming out of spirit, so that will help us significantly. We have implemented a move-ready safety process so that the airplane cannot move down the production floor if equipment is not installed or work has not been accomplished.
▶ 0:53:39Mr. Ortberg: If the aircraft has equipment not installed, we go through a safety risk assessment and look at the risk of moving the aircraft. We have done that 800 times. Of the 800 times, 200 times we have not moved the aircraft. We have held the aircraft because moving it would incur a risk to the production system. We've also seen a 50% reduction in work that has traveled down the factory floor.
▶ 0:54:09Mr. Ortberg: We continue to work at improving those numbers. Those are one of the kpi indicators that we are using with the faa. We have made drastic changes to our internal process to make sure that this will never happen again.
▶ 0:54:22Chair Cruz: Final question. I'm sure that you are aware that whistleblowers and others, including ethiopian authorities, have suggested manufacturing errors, particularly with electrical wiring, contributed to the max crashes. Is this an issue you've discussed with boeing employees since joining the company? If so, what is your opinion on if there were also manufacturing defects that may have led to the center defect -- sensor defect?
▶ 0:54:52Mr. Ortberg: That obviously happened before I joined the boeing company. My understanding is that the cause of the crash was the mcas design. It has been redesigned and design changes have been incorporated into all aircraft. I'm not aware of any electrical wiring issues associated with that. I'm glad to look into that and get back to you.
▶ 0:55:18Chair Cruz: To be clear, your testimony is you have not had conversations with boeing employees about if there were electrical issues that also contributed to that crash?
▶ 0:55:27Mr. Ortberg: Not specifically, no.
▶ 0:55:31Sen. Cantwell: Thank you for the change in tone at the top, the four principles. I wanted to drill down on the safety management system.
▶ 0:55:45Sen. Cantwell: It has been a voluntary compliance, but our law -- actually, in the implementation of the 2015 settlement agreement it was required to implement a safety management system. Since we past legislation for a mandatory safety management system. You mention the expert panel.
▶ 0:56:14Sen. Cantwell: I think they were critical of the sms structure that existed at boeing under that voluntary structure. How is it that this is going to change? Will you commit today to a fully functioning safety management system that meets faa standards?
▶ 0:56:31Mr. Ortberg: Senator, you're right. We have been operating under a voluntary sms for approximately the last four years. I think the alaska door accident was a cathartic moment for all of us to step back and look at what happened and how this could happen within the safety management system. We had the expert panel. We also brought in outside consultants.
▶ 0:56:57Mr. Ortberg: The faa did a comprehensive audit, and we found significant gaps in many of the processes that we use to implement our safety management system. Those gaps are part of our safety and quality plan that we are working with the faa to improve the overall performance. I'm committed to a mandatory safety management system. I appreciate your leadership there. We are working to get that done.
▶ 0:57:26Mr. Ortberg: Actually, I would like to have that in place by october of this year. We submitted our draft to the faa and are absolutely committed to move into a mandatory sms.
▶ 0:57:35Sen. Cantwell: Thank you for that commitment. The expert panel could have been more specific about this recommendation and the industry writ large things that it is the gold standard. The oda faa oversight and the delegation of authority, this is not -- I think the person in charge of this at boeing has recently been let go or put on leave.
▶ 0:58:06Sen. Cantwell: So, you can tell me how you plan to bolster this position within the company. When you look at issues like the max anti--icing issue, these are issues that have been the subject of much investigation.
▶ 0:58:33Sen. Cantwell: In one incidence my colleague who is not here yet and I joined a letter asking for this issue to be addressed and not delayed. I think that the committee is getting a sense that the ntsb makes recommendations, the faa kind of ignores them, and it takes a long time for them to be addressed.
▶ 0:58:54Sen. Cantwell: What we are trying to understand is in the oda process, what structure and oversight, before we hear from the faa on this point, what you think about these incidents not being addressed in the oversight process? You know, like the anti-icing system and rodder issue -- rudder issue?
▶ 0:59:21Mr. Ortberg: We looked at the series of recommendations from the faa, many require support from the boeing company to provide information and data. I can assure you that they will get full support to ensure that they have access to all of the information that they need.
▶ 0:59:40Mr. Ortberg: On a higher level, the oda, as you know, is a delegation that the faa provides to us to do some work that a typical faa inspector would do. I think the oda is an important element of the success of the aerospace industry. The oda's and our organization operate independently on behalf of the faa.
▶ 1:00:07Mr. Ortberg: They have a direct line of communication with the faa. As part of the feedback, we have made changes to our oda organizational structure to ensure that they are not feeling pressure from management to do things that are not proper. I think that that has been effective.
▶ 1:00:30Mr. Ortberg: We put an ombudsman in place for the oda so that they have someone to go to if they see something that they don't like or are feeling any kind of pressure. I think that that is helping. We also survey them to continue to ask them if they feel undue pressure from management or undue oversight from management to do their job.
▶ 1:00:53Sen. Cantwell: I see that my time is expiring and I want to get in this point. You are committing to fix those flaws that I mentioned. We can come back to this maybe in the second round. What are you doing to fix the design and manufacturing defects so that they are not submitted to begin with to the faa? As we have to think about our oversight of faa and the role that they play, we are trying to understand.
▶ 1:01:22Sen. Cantwell: What isn't working in this process at the manufacturing level that we have these defects? They get checked off on a list, that is in compliance. I don't know if you have a quick answer to that, but --
▶ 1:01:37Mr. Ortberg: Senator, I mentioned the fuselage improvements. We have over 1000 applications where we are working with our supply chain to improve the number of defects. A main component is to get to the root cause. We can't just fix the defects, we have to get to the root cause and make sure that the defects go away.we enhanced our focus on root cause analysis and ensuring that we are understanding where the defects are being generated.
▶ 1:02:08Mr. Ortberg: We are stopping the defect generation so that we are not dealing with them. That is the fundamental improvement that I think we will see.
▶ 1:02:13Sen. Cantwell: And making sure that the attention is focused not by a businessperson who is saying we have to go fast?
▶ 1:02:20Mr. Ortberg: I want to be clear. I have not provided financial guidance to wall street for the performance of the company. I have not provided guidance on how many aircraft we will deliver. I have gotten financial coverage so that we can allow our production system to heal. I am not pressuring the team to go fast. I am pressuring the team to do it right. That is the most important thing that we can do at this point.
▶ 1:02:46Sen. Cantwell: I agree. Thank you.
▶ 1:02:49Chair Cruz: Senator fischer.
▶ 1:02:52Sen. Fischer: Thank you, Mr. chairman. I want to thank the family members who are here representing and advocating for their loved ones who lost their lives on ethiopian airlines flight 302 and lion air flight 610. I want to offer you my condolences. This committee has a responsibility to work with the airline industry and faa to ensure tragedies like these don't happen again.
▶ 1:03:24Sen. Fischer: Mr. ortberg, I appreciated the opportunity to connect with you earlier this week and discuss your ongoing effort to enact much-needed reforms at boeing. In our prior conversation we discussed some of the more challenging aspects of implementing boeing safety and quality plans, specifically you acknowledged the company's culture as being the most difficult.
▶ 1:03:51Sen. Fischer: While I can appreciate the difficulty in reforming long-standing cultural challenges to a corporation as large as yours, and while I agree it needs to be addressed, that is a long-term change and it doesn't necessarily produce immediate results.
▶ 1:04:09Sen. Fischer: In the interim, as you look to instill confidence with the flying public, what challenges and success has boeing had in enacting the safety and quality plan and meeting the six key performance indicators that are outlined in the plan?
▶ 1:04:28Mr. Ortberg: As you mentioned, senator, the safety and quality plan has a series of tasks to improve our safety and quality. We also have metrics that we are using to actually measure, are those tasks actually generating the results that we want? Those six metrics have control limits of what is acceptable and what is not acceptable. We monitor those on a regular basis.
▶ 1:04:59Mr. Ortberg: These are metrics that we share with the faa. On a digital dashboard they can look at it at any time, and they do. We look at trends, how are the metrics performing day on, day on, day on? What does the trend look like and what does the absolute number look like? So far, and it is admittedly early in our production recovery system, we are seeing the results that we expect.
▶ 1:05:29Mr. Ortberg: Key metrics are trending in the right direction. They are not all exactly where we want them to be, and we didn't expect that, so we continue to measure that. We do that across our fleet of aircraft, not just the 737 max program. Those metrics will be the basis that we will use for determining are we able to go to a higher production rate?
▶ 1:05:54Mr. Ortberg: If those metrics are not showing production stability, then we won't request moving to a higher production rate. We monitor them regularly, and we talk with the faa monthly about how we are doing with the key performance indicators.
▶ 1:06:09Sen. Cantwell: I appreciate the focus on safety. We have to have that. In our call I also brought up to you the concern with the production rate, the timeliness of it. You told me that boeing is currently delivering planes two years behind schedule.
▶ 1:06:35Sen. Cantwell: My concern with those delays are the potential for negative consequences for both national security and commercial operations.
▶ 1:06:54Sen. Cantwell: How, when you are looking ahead at production rates, and I know it is early in your tenure, but boeing should be able to deliver planes in a timely fashion while also meeting the high safety and quality assurance expectations from the faa, from your customers, and from this committee, what this committee expects.
▶ 1:07:22Sen. Cantwell: What steps do you see boeing taking to reduce the production delays while still adhering to the plan? The metrics, the six steps, the metrics that you are seeing, and when do you anticipate, in a good setting, to be able to offer some confidence to the public on that?
▶ 1:07:51Mr. Ortberg: Senator, to be very clear, we won't ramp up production if the performance is not indicating a stable production system. We will continue to work on getting to a stable system. I have not provided a date as to when we are going to get up to 38 per month rate. I suspect it will be sometime this year. I am hopeful that is where the production rates, or production stability allows us to go.
▶ 1:08:19Mr. Ortberg: I will tell you, I've talked to almost all of our airline customers, and they know. They are frustrated with us because we are late on aircraft delivery, but they know that we have to do this right. I can tell you that I have 100% support from them to do it right. I'm not going to push to get the aircraft and end up having additional issues. Get it right, we will be patient with you.
▶ 1:08:48Mr. Ortberg: The good news is, our customers have stuck with us. I expect that they will. Once we get the production system stable, we will move up in production rate. I don't think we will ever get to where we recovered to all of those deliveries, ever get to a rate where people have their airplanes when they originally ordered them, but I think that our customers understand and are working with us.
▶ 1:09:15Sen. Cantwell: We want you to be
▶ 1:09:18Successful -- Sen. Fischer: We want you to be successful.
▶ 1:09:21Chair Cruz: Senator klobuchar.
▶ 1:09:25Sen. Klobuchar: Thank you, chairman. I wanted to start by expressing my deepest sympathies and appreciation to those who are here today who lost loved ones. We just lost a minnesotan in the tragic midair collision in washington, D.C. my thoughts are with all of you and I hope that we can make this better.
▶ 1:09:52Sen. Klobuchar: As chairman cruz noted there was a recent close call, unrelated to boeing, involving a delta jet filled with minnesotans, including a member of my staff, that came within 500 feet of a military plane. I actually talked to the dod over the weekend, Mr. chairman. They have assured me that this is going to be an immediate faa investigation.
▶ 1:10:23Sen. Klobuchar: From what I understand, this was not about the airline. We have to figure out what went wrong. So, my questions of you, Mr. ortberg, thank you for being here, and your testimony you discussed efforts to elevate the boeing safety and quality culture and how you've engaged workers in the process, generating 26,000 improvement ideas from employees. Could you talk about what work you've done on open communications?
▶ 1:10:54Sen. Klobuchar: How are you ensuring that employees continue to speak out on issues when they see them?
▶ 1:10:58Mr. Ortberg: Thank you, senator. The culture change in allowing people to speak up is critically important to me, and I think to the success of the long-term of the boeing company. We have made significant changes in our business processes to get people closer to the people building and designing the aircraft.
▶ 1:11:27Mr. Ortberg: We have initiated a culture change process within the company which, I believe culture it starts with the values and behaviors at the leadership. We need to walk the talk and people need to see that in the organization. We are putting those values and behaviors into our performance management system so that people are evaluated and their annual performance is determined based on how they exhibit those values and behaviors.
▶ 1:11:57Mr. Ortberg: We are including it in our training program so that we are training our leaders. We are making leadership selection decisions based on how these people exhibit the behaviors in the company.
▶ 1:12:09Sen. Klobuchar: Thanks. Go ahead. One more thing.
▶ 1:12:14Mr. Ortberg: Once people understand what behaviors are acceptable, they tend to align to them. It is when we have a leadership that is maybe not exhibiting the behaviors that are on the poster on the wall but not exhibiting those, people are smart. They figure out how to understand what they are really being rewarded on. We are really working to change that culture.
▶ 1:12:41Mr. Ortberg: To get to a culture where people feel free to speak about issues and communicate across their teams so that we can get issues resolved quickly before they turn into a bigger issue.
▶ 1:12:52Sen. Klobuchar: We also have the pipeline of workers and the wall street journal did a report on this last year. Senator moran and I were included in the faa reauthorization. Our bill that created a new grant program to train new manufacturing technical workers. Can you talk about what you've done to make sure that we are getting in more workers, and what we should be doing better on that front?
▶ 1:13:21Mr. Ortberg: Senator, we spend a lot of activity in early stem education supporting stem-related activities to try to get more young students into stem fields to support the work that we need. Our workforce is relatively stable right now, which is good. I think we came out of covid and had significant workforce demand. We have been through that.
▶ 1:13:50Mr. Ortberg: Our focus is on training and ensuring the people that we brought in are effective and efficient in what they are doing.
▶ 1:13:57Sen. Klobuchar: One last question. Following the alaska airlines flight 1282, the door blowout, can you walk through with the enhanced oversight, you have been under enhanced oversight, walk through it quickly compared to the previous oversight, faa oversight.
▶ 1:14:16Mr. Ortberg: -- Mr. ortberg: so,l formal inspections have been done at boeing, where every door, door, plug, or active door, is going through additional inspection to make sure there is no workmanship error that would require re-working at a later date in a production facility.
▶ 1:14:41Mr. Ortberg: As I said, we are seeing very good improvement in the overall quality of the fuselages, particularly around any door related issues. We have had a significant amount of inspection.
▶ 1:14:53Sen. Klobuchar: Thank you.
▶ 1:14:55Chair Cruz: Senator moran?
▶ 1:14:58Senator Moran: Thank you. I'm told that with your consent I get to make an opening statement. I'm grateful for that. I want to follow up on the point you made in your earlier indication of failure to here return from the army.
▶ 1:15:14Senator Moran: Just to highlight the issue and its broad magnitude and consequence, the ntsb report in regard to flight 53 42 originating in wichita, kansas, having its fatal conclusion at reagan national, now 63 days ago, ntsb's preliminary report indicates that within the files of the faa there were, the
▶ 1:15:44Senator Moran: Indication is that there were 15,000 near misses between helicopter and commercial airplanes at reagan national between october 24. 15,000 near misses. Ntsb also found in the records of the faa that it's possible for a helicopter on route four to have as little as 75 feet of vertical separation from airplanes on approach to runway 33.
▶ 1:16:15Senator Moran: Suggesting to me that there are significant challenges in potential consistently at reagan known but not responded to over a long amount of time.
▶ 1:16:30Senator Moran: One of those issues, because of the potential for those near misses and the fact that they are happening with such a frequency is the issue of ads-b out, for which the chairman and the ranking member are seeking information from the army as to why and potentially on all occasions ads-b out is turned off. Mr.
▶ 1:16:55Senator Moran: Chairman, I am grateful for your efforts and your indications of how seriously you take this circumstance in your demand for information. In today's hearing, now, to my opportunity to ask questions, this accident that occurred 63 days ago reminds me of the fragility of life and it makes me even more compassionate and concerned for the victims of those who died in previous
▶ 1:17:26Senator Moran: Crashes. It is a wake-up call and opportunity to reassess things that are really important in life. We need to do everything, as we know we need to do, to make certain that those who fly know that they are safe, because they are safe. I am going to ask you, Mr.
▶ 1:17:45Senator Moran: Ortberg, about a number of things related to wichita and manufacturing there, but I want to highlight my view that before we talk about the economic and job opportunities that occur with your company, that the most important thing for the future of the aviation industry is that the public knows they can fly safely, because they can. In the absence of that, there is no real future for the commercial aviation industry.
▶ 1:18:18Senator Moran: So, safety undergirds everything that you need to do in that we need to do for a future for your company and for a future for the aviation industry in our country. So, I want to ask you specifically about some things in wichita. You were kind and gracious enough on your third day on the job to visit wichita. You indicated in your testimony the role of spirit aerosystems to the boeing company.
▶ 1:18:46Senator Moran: I don't know that you said this in your testimony, if you did, I will repeat you, but otherwise, boeing is in the process of acquiring spirit aerosystems. That's a hugely important company in kansas. Our largest private employer, employing about 12,000 people.
▶ 1:19:05Senator Moran: I want to use this opportunity, because it would be rare for folks back in kansas to have the opportunity to ask you about what the future of their jobs are and what the future of many businesses who rely upon work at spirit. We have hundreds of small businesses who do work for spirit and also do work for boeing. It's not just one company.
▶ 1:19:33Senator Moran: It's not just spirit aerosystems, it's the whole system by which kansas aerospace capital operates. When I first had a conversation with boeing officials about the potential acquisition of spirit aerosystems, one of the things I think was said to encourage me, to be supportive, this is me putting my own motives into the sentence, but the point was made that it was indicated that without the acquisition of
▶ 1:20:04Senator Moran: Spirit aerosystems, the new generation of any aircraft developed by boeing would not be, would not involve work in wichita or work in kansas. With the acquisition, the statement was made that the work could be more likely to occur. You are going to build a new aircraft one of these days. What is the plan for where that work will take place?
▶ 1:20:29Mr. Ortberg: We are an airplane company, we will do a near airplane. That's not near the near future given the financial performance and challenges we have. Obviously, we are studying that and have to determine what the final design of that aircraft would be to determine where we would manufacture certain components. Let me just assure you that spirit aerosystems in the work we do in kansas is critically important.
▶ 1:20:58Mr. Ortberg: We are spending a significant amount of our capital to acquire that company and we are not going to do that and move the work out of kansas. The work we are doing there will stay there. I am in fact very hopeful that once we get the acquisition closed, we will find opportunities to do actually even more work. Again, it's critical that we return to ramp up production. As you know, all of those fuselages are built by spirit aerosystems.
▶ 1:21:28Mr. Ortberg: Any time we can move to a higher production rate, it will create jobs and opportunities for us in wichita.
▶ 1:21:35Sen. Moran: What's the reason the acquisition of spirit makes sense, is necessary, for the purposes of boeing building a safer aircraft and having a process in place that works better than what we saw with the door plugs?
▶ 1:21:49Mr. Ortberg: We really believe that being able to focus the interest -- organization and integrate it within our commercial production system as one integrated organization will help us to be more efficient and will help improve the overall quality and performance of the fuselages we are getting from spirit. As you know, it's not just 737 fuselages.
▶ 1:22:15Mr. Ortberg: We have defense related activity and I'm also excited about the opportunities to couple that with our defense business, to grow the work we are doing there. There is great people in wichita. You and I had the opportunity to go and meet with them. There's great development of the workforce going on for future employees in wichita. It's a great opportunity for us to exploit that workforce and build more products in wichita.
▶ 1:22:42Sen. Moran: Mr. ortberg, you surprise me by bringing up the topic of defense work. I was going to forgo that this morning, on every occasion you and I have had that conversation and insisted that -- because I assist -- insisted on it. It causes me to then ask this question. First of all, congratulations to boeing on its successful air force contract with the 47.
▶ 1:23:11Sen. Moran: What can I expect in regard to work in kansas that would help to fulfill that contract?
▶ 1:23:16Mr. Ortberg: Senator, I can't answer that right now. I am headed to, after this hearing, to st. Louis to talk with my team. There is clear security classifications and -- that I need to understand to get back to you on that answer.
▶ 1:23:33Sen. Moran: I look forward to having that conversation again. Thank you very much.
▶ 1:23:38Chair Cruz: Senator duckworth?
▶ 1:23:41Senator Duckworth: Thank you, Mr. chairman. Again, thank you, Mr. ortberg, for meeting with me a couple of weeks ago. On the january earnings call, touching on the questions you have been asked, it's important to clarify. You told investors he wanted to get through the production cap of 38 and reach a production of 42 per month by sometime this year.
▶ 1:24:04Senator Duckworth: When I ask you about this, and as I have listened to you answer my colleagues this morning, I was encouraged when you said that this was not an expectation you were setting for wall street and that your priority was quality, not an increase in rate. Can you assure the committee you have not set a 737 max production goal for this year in that neither the boeing directors nor other senior management are under pressure to reach a particular production rate by the end of this year?
▶ 1:24:33Mr. Ortberg: Senator, we have to have an internal plan to allocate our financial resources. We have an internal plan that has an assumption on the number of aircraft, but we have not committed that plan externally. Normally, airplane manufacturers put out a number of aircraft that they will deliver and they marched to that throughout the year. We are not doing that.
▶ 1:24:58Mr. Ortberg: We are not putting out the financial component or the number of aircraft we will produce. I have said what I have said here today, which is that I hope we move from 38, move above 38 per month this year, sometime later this year. When that happens is when the kpis indicate we are ready to do that. Obviously, we have to have faa oversight.
▶ 1:25:26Mr. Ortberg: The faa essentially makes the decision as to whether they approve of our ability to move beyond that.
▶ 1:25:30Sen. Duckworth: In light of the internal plan, can you assure the committee that neither you yourself or any other board member or senior manager at boeing has a financial incentive tied to an increase in the production rate?
▶ 1:25:45Mr. Ortberg: We have an incentive plan based on the overall performance of the company. If we produce higher airplanes, that will result in higher performance. It's indirect, but we don't have a specific number tied to it. Nor have I communicated a specific number to the employees in the company. Employees are not marching to a particular airplane production rate.
▶ 1:26:11Sen. Duckworth: But if it increases there are financial incentives for yourselves and senior board members?
▶ 1:26:17Mr. Ortberg: Our annual plan has sales, profit, the normal financial measures. And obviously, the more planes that we deliver, the higher the numbers would be.
▶ 1:26:28Sen. Duckworth: I want to go to the delegation of inspection authority discussion that has already happened already today. In october, d.o.t.'s inspector general found that the faa oversight of boeing production was so bad that the ig issued six separate recommendations to the faa to fix the process.
▶ 1:26:51Sen. Duckworth: There were many terrible findings in the report, but one of the most shocking was that shortly before the door plug blowout, individuals within the faa wanted to boeing. Even worse, the individuals at faa wanted to do this without any criteria by which to assess whether boeing could be trusted to properly carry out the inspections. It is not just unacceptable, it's a dereliction of duty on the part of the faa.
▶ 1:27:19Sen. Duckworth: Prior to the 730 seven max crashes and production problems, faa allowed boeing to self approve their aircraft. However, in the wake of the crashes we learned that boeing had abused their authority, knowingly and repeatedly produced 730 seven max aircraft with nonfunctioning angle of attack dis-alerts.
▶ 1:27:44Sen. Duckworth: I believe strongly that faa must not delegate inspection authority back to boeing until at a minimum faa fixes its own ineffective oversight of boeing production. Will you commit to not seeking and not accepting delegation of airworthiness until the faa has implement it all 16 recommendations from the october inspector general report?
▶ 1:28:06Mr. Ortberg: I can commit to we are working transparently with the faa and will support by providing them never information they need from the boeing company to address the ig report. Those recommendations were specific to the faa, I would have to defer to them in terms of their plans relative to implementing those recommendations.
▶ 1:28:29Sen. Duckworth: That is not what I'm asking you. It's up to the faa to determine if delegation is permissible but it will be up to boeing to determine as to whether they can accept the delegation of responsibility. You are trying to restore the reputation of boeing. I don't see how it would help that effort for boeing to return to inspecting their own airplanes while the oversight process is still broke -- broken. It would look like boeing is taking advantage of a hobbled regulator.
▶ 1:28:57Sen. Duckworth: Will you commit to not seeking this until all of the ig inspector recommendations have been implemented?
▶ 1:29:04Mr. Ortberg: We again have to work very closely with the faa. They are our regulator, they provide the oversight and the direction. I cannot commit to that.
▶ 1:29:15Sen. Duckworth: Why not? If they came to you right now and said we want to give you the inspection authority back today, would you accept it?
▶ 1:29:23Mr. Ortberg: Only if that made sense relative to the performance of the tasks and safety of the aircraft. We would not sacrifice the safety of the aircraft by asking for delegation.
▶ 1:29:35Sen. Duckworth: I'm asking you to commit to not accepting it until the process has been fixed. So, you would accept it back?
▶ 1:29:43Mr. Ortberg: The delegation is an important part of our business process and in how we interact with the faa. We have to continue to go forward with delegation. We are committed to making improvements where, where, where needs have been identified.
▶ 1:30:00Sen. Duckworth: You have a track record of abusing that self inspecting authority. You have already said that you and senior managers and board members would make more money if you can put out more aircraft. I think it is not appropriate at this time for you to accept that delegation of authority, should it be offered to you, before the faa has met all 16 of the ig recommendations on how to fix the inspection system.
▶ 1:30:28Chair Cruz: Thank you. Senator blackburn?
▶ 1:30:33Senator Blackburn: Thank you, Mr. chairman. Mr. ortberg, thank you for being with us today. Listening to this today, it made me think of secretary duffy's remarks that it was time for you all to have some tough love. I agree with that and appreciate the conversation around how dedicated you are to addressing a comprehensive safety plan. That is important.
▶ 1:31:01Senator Blackburn: I want to talk with you about what you are doing to improve your company's culture. That work culture. This is a very important part of any business. It appears that your company work culture has been frayed. Very quickly, what are you, personally, doing to change this work culture at boeing?
▶ 1:31:32Mr. Ortberg: Senator, the first thing I'm doing is leading by example and getting people closer to the people doing the design and production of the airplane. So, you know, tomorrow I will be in st. Louis with the people manufacturing military airplanes on the floor.
▶ 1:31:50Mr. Ortberg: Next week I will be in everett, washington, with our wide-body team, talking to union members about the difficulties they are having in manufacturing the aircraft and what they need to do to help them be successful. So, that's the first step in changing the culture, getting people to recognize that the role of leadership is to help the organization be successful, not to make themselves successful. We have got a lot of activity under way do that.
▶ 1:32:19Sen. Blackburn: How are your employees responding to that?
▶ 1:32:23Mr. Ortberg: Very positive. We did and all employee survey, a means I'm going to use to measure the culture change. We have that survey structure so that I can look at anyplace in the organization.
▶ 1:32:37Sen. Blackburn: Then let me do this, I want to ask you about whistleblowers. We have heard from some of the boeing whistleblowers. I know you are familiar with their names. But you don't have a good record of protecting and supporting whistleblowers.
▶ 1:32:57Sen. Blackburn: Some of the stories around these whistleblowers have been very upsetting to people like me, who have worked through my public service to protect whistleblowers. I think they are essential. So, talk to me about what you are doing to change that policy to support and not ostracize or isolate whistleblowers.
▶ 1:33:19Mr. Ortberg: The company has an anti-retaliation policy. It's unacceptable for anybody to retaliate against either a whistleblower or anyone bringing up a quality issue. I have made that perfectly clear in all of our all employee meetings, our all employee sessions. I have told employees that if they have an issue, send me a note, I will address it. Send me a note.
▶ 1:33:47Mr. Ortberg: I have met with one of the whistleblowers. My door is open to discuss with any of the whistleblowers what they are seeing to make sure that there is no retaliation in the organization. But this is a part of the culture change within the company.
▶ 1:34:02Sen. Blackburn: Not to interrupt, but I want to ask you, are you stepping back to some of those whistleblowers who have experienced a less than positive relationship? Are you writing those wrongs?
▶ 1:34:17Mr. Ortberg: Senator, in many cases the whistleblowers I'm aware of, those activities happened a long time ago.
▶ 1:34:26Sen. Blackburn: No doubt.
▶ 1:34:27Mr. Ortberg: Some are still with the company, and I met with one of them. I know that in the past, all of the, all of the retaliation claims have been thoroughly investigated. If there is retaliation, corrective action has been taken.
▶ 1:34:45Sen. Blackburn: Let me move on. Co. Mac, we are all concerned about commack and the chinese communist party. The ceo of ryanair recently said that they were open to buying planes from co-maca. We are all concerned about competition that would come from china and the chinese communist party.
▶ 1:35:09Sen. Blackburn: What steps are you taking to innovate and to make certain that you are competing and out competing our foreign competitors?
▶ 1:35:21Mr. Ortberg: Senator, comac is a competitor. We have a much bigger competitors in europe that we compete with on a regular basis and all of our markets. We have to stay competitive. We have to invest in the future of our company. We are investing in new versions of the max aircraft. Investing in the new largest wide-body dual engine airplane in history with our triple sevenx program.
▶ 1:35:54Mr. Ortberg: All of those investments are about us staying ahead of the competition and making sure that we can compete in a global market.
▶ 1:35:59Sen. Blackburn: Thank you.
▶ 1:36:01Sen. Cantwell: Senator lujan is recognized.
▶ 1:36:08Senator Lujan: Thank you, chairman. Thank you for being here, Mr. ortberg. I'm going to follow up with something senator blackburn asked. What strengthening of whistleblower protection steps have been taken around potential
▶ 1:36:21Safety Issues Mr. Ortberg: ? -- issues?
▶ 1:36:26Mr. Ortberg: We have a speak up system, the anonymous ability to speak up about what's going on. We have a chief compliance officer who is independent from the organization, who reviews the speak ups. I have a monthly meeting with that chief compliance officer to make sure that if people are bringing things up anonymously, that they anonymity is retained.
▶ 1:36:58Mr. Ortberg: Look, our policy, as I said, we have a clear anti-retaliation policy. If we see any retaliation, we address it immediately with disciplinary action, up to and including dismissal.
▶ 1:37:10Sen. Lujan: Appreciate that. Representatives from the boeing machinist union, the society of professional engineering employees in aerospace, emphasized the importance of employees feeling empowered to speak openly about safety concerns. Mr. ortberg, will you commit to having union representatives directly involved in boeing safety discussions and decision making going forward?
▶ 1:37:35Mr. Ortberg: Senator, we have made some new changes in that regard, actually, as a part of our recent iam negotiation. We set it up to where the union actually has an annual meeting with our safety committee so that they can go completely around management and talked directly to the board of directors about any safety issues they see.
▶ 1:38:02Mr. Ortberg: I also have a regular meeting with the, with the union leadership on all sorts of issues, including any safety related issues. And of the speak up system I talked about is certainly open to all union members, as well as nonunion employees.
▶ 1:38:20Sen. Lujan: Sounds like that is something you will commit to and already have?
▶ 1:38:24Mr. Ortberg: We are doing that. I want an environment, where if there is a safety related issue, and I don't care who it is, if the issue is communicated and acted upon immediately, that's the environment we are trying to make.
▶ 1:38:38Sen. Lujan: Appreciate that. Later today, the president plans to announce reciprocal tariffs against a number of countries. Few details are known beyond this to. If the trump administration moves forward with proposed tariffs, what impact would this have on the boeing operations, particularly your suppliers and workforce in places like mexico?
▶ 1:39:02Mr. Ortberg: A little bit of the answer to that is it depends on what the tariffs are. Obviously I don't know that, so, I will be watching this afternoon as it is announced. It's important to us. I will say 80% of the airplanes that we deliver, the commercial airplanes that we deliver, or outside the united states. Free-trade is very important to us. 80% of the content of those planes comes out of the united states.
▶ 1:39:31Mr. Ortberg: We really are the ideal kind of export company where we are out selling internationally and it is creating U.S. jobs. Long-term, high-value U.S. jobs. It's important we continue to have access to that market and don't get in situations where certain markets become closed to us.
▶ 1:39:50Sen. Lujan: Where does boeing see the most significant opportunities in the next decade and how will they make sure that practices keep pace with ambition?
▶ 1:40:00Mr. Ortberg: We have nearly half of a trillion dollars in current backlog in airplanes ordered. Our biggest opportunity in the next five years is to perform, to deliver high quality, get our safety quality plan in place. We have a couple of new variants I talked about where we need to get through certification and into the market.
▶ 1:40:27Mr. Ortberg: I'm confident that the boeing company can thrive if we can get our safety and quality plan done right. And we will.
▶ 1:40:34Sen. Lujan: I'm not going to ask you who named the f 47, I will leave that to someone else. I yield back.
▶ 1:40:40Chair Cruz: We now have a second round of questions. Senator cantwell?
▶ 1:40:48Senator Cantwell: Thank you. That's a trivia question. He was a test pilot from your state, is that what you are saying? Ok. [laughter] ok. Well, we want to return to if it ain't boeing, wii and going. That's where we want to go. -- we ain't going. That's where we want to go.
▶ 1:41:16Senator Cantwell: These questions on compliance, in the 2020 act that we passed the act of the max crashes, we mandated you cannot certification tasks related to critical functions. We have basically said you can't delegate.
▶ 1:41:33Senator Cantwell: I understand my colleague's question, and it is important, but in reality, we decided as a committee that we are not allowing the delegation of critical functions anymore, because the m caste system was a critical change. It was something that the faa missed, in addition to the company missing it. The faa didn't understand.
▶ 1:42:00Senator Cantwell: We believe in redundancy in a lot of different areas. Redundancy in this case of the faa doing its job and understanding what is being proposed. So, those critical features cannot be delegated, cannot be delegated. The faa has to do its job. I think that the next time that we have a nominee for an faa administrator, these will be relevant questions for them on their strategy.
▶ 1:42:28Senator Cantwell: But we will be asking them how they are going to have the workforce, the technological expertise, and all of that to stay at pace and make the oda system work, but we are not allowing them to delegate critical safety features. Anyway, that will be an interesting point.
▶ 1:42:55Senator Cantwell: Now, I do think that the, the question I have on the compliance administrator, you guys have a following problem-solving method. I know the person in charge of that has recently been either laid off or changed. What are you doing to make sure that that position, why the change?
▶ 1:43:15Senator Cantwell: What are you doing to make sure that who you have in this job is standing up for these root cause analysis issues you mentioned?
▶ 1:43:27Mr. Ortberg: We go through an elaborate interview process to make sure we select the best talent to do that job. It's a critical, critical component of that job, to be able to, to provide that overall independence. We recognize that. We will fill it with the appropriate person after we get through the interview process.
▶ 1:43:49Sen. Lujan: Do you -- Sen.
▶ 1:43:52Cantwell: Do you think that you are in alignment with machinists on what the feedback process is in the company? I asked the former faa administrator if he believed that the faa should have oversight into those issues being brought up. You mentioned speak up a couple of times.
▶ 1:44:13Cantwell: I'm not familiar with where you are in your conversations with machinists and spia, if they are satisfied, what we have to do to make sure that they feel they have a voice without intimidation.
▶ 1:44:26Mr. Ortberg: I think we are making progress in that area, senator. We do survey to make sure we understand what is the current situation. We have seen three times the number of speak ups in the last year over the prior year, giving you an indication that people are feeling comfortable to use the system. We still have culture work to do.
▶ 1:44:48Mr. Ortberg: I think that there are probably people in the organization who say I'm not sure I feel comfortable about utilizing this system. We will continue to work on that, to make sure that everybody feels comfortable utilizing it. But we are seeing improvements. We have also improved the system so that it is easier to use, which I think is helping as well.
▶ 1:45:11Sen. Lujan: -- Sen. cantwell: going back to the expert panel report, they were saying that the processes around structure are done in such a way where all employees understand their role and the procedures and training are complex and in a constant state of change, creating employee confusion among different worksites and employee groups.
▶ 1:45:41Sen. Lujan: So, I think that getting this employee input, then what would you say about the faa having insight into that? Listen, this committee is, we've, we are having a very big discussion with both faa and ntsb on trend reports. The ntsb has identified a lot of trends. We are saying why, faa, are you not paying attention to the trend reports?
▶ 1:46:08Sen. Lujan: We also mandated the requirement that they publish a trend report every year so that we can see what the ntsb thinks are in those trend reports. Are you committed to the faa having some insight into that process? Whatever the machinists are. Spia members can speak up, the faa can have insight into that?
▶ 1:46:31Mr. Ortberg: We are absolutely committed to that. I have talked to the faa. I have talked to the chairman from the ntsb. We have made sure that they know we will be transparent and provide them the information to allow them to do that. I think that the chair has publicly said she believes the next accident is lying in the data and that we need to do a better job of analyzing the data.
▶ 1:46:59Mr. Ortberg: We have stepped up our in-service data collection process for airplanes and service so that we can do just that, doing more data analytics on what we are seeing in order to identify trends before they can become incidents. I think that what she says is absolutely right. We need to be transparent, the industry needs to be transparent on the data.
▶ 1:47:22Sen. Cantwell: Thank you for that. My time has expired for the next round, but that is a change. What you just said is a big change, is it not? The in-service data analytics?
▶ 1:47:35Mr. Ortberg: Senator, it's a massive change that we have been making in the company. We have talked a lot about manufacturing changes around how we built and designed the airplane. But it is also super important that we pay attention to how the airplane is being operated, how it is being maintained.
▶ 1:47:55Mr. Ortberg: We have the ability to collect a lot of that information from our customers and look for trends, use artificial intelligence algorithms to help us sort through that data and address the trends. It could wind up with changes to the maintenance processes, the training, whatever the corrective action, it is important we do that.
▶ 1:48:20Sen. Cantwell: I do believe you could do a better job at analyzing that information faster and getting that to your engineers in order to give them data to think about things. So, I think that's a very important change. Also, my colleague was asking about trade. I'm not going to ask you about that, but I will point out that the world demand for airplanes is 40,000 planes over 10 years. The races on.
▶ 1:48:51Sen. Cantwell: I really appreciate you getting the safety right. Thank you.
▶ 1:48:54Chair Cruz: Senator markey?
▶ 1:48:58Senator Markey: Thank you very much, Mr. chairman. First I want to offer my deepest condolences to the families of the victims of the boeing crashes who are here today. Thank you for being here. We are going to remember your family members every day that we are working on these issues. Your courage in fighting for a safer aviation system is inspiring.
▶ 1:49:23Senator Markey: It is going to make our committee accountable to making sure that we do the work we want to see put in place for everything that flies in our country and around the globe. So, I'm very grateful for your incredible work on these issues, thank you for being here. Mr. ortberg, thank you for being here today.
▶ 1:49:46Senator Markey: Your work over the past several months to improve the boeing safety culture and improve the lines of communication with workers. I want to discuss that safety culture and the importance of labor representation in key engineering decisions. So, I want to get straight to the point. Does boeing currently have a single representative of workers on its board of directors?
▶ 1:50:12Mr. Ortberg: No, sir.
▶ 1:50:15Sen. Markey: Do you agree that it's a problem that the engineers and aerospace professionals responsible for designing and manufacturing the planes are excluded from boardroom decision-making?
▶ 1:50:29Mr. Ortberg: Senator, as I mentioned, we have a process whereby which we have the union membership come and meet with our aerospace safety committee board of directors to discuss with the board any issues they see, be they safety-related or other related issues. They also have access to me within the management of the organization.
▶ 1:50:54Sen. Markey: Again, I think that all of the munication should be much more frequent and direct andh more frequent and direct and more frequent and direct and thate frequent and direct and that frequent and direct and that ifrequent and direct and that isrequent and direct and that is equent and direct and that is whyent and direct and that is why nt and direct and that is why the nd direct and that is why the board ect and that is why the board oft directors is such a focal point, because obviously you and the other executives have to deal with the board of directors on an ongoing basis. The 2025 proxy statement from boeing identifies seven directors with expertise and safety.
▶ 1:51:20Sen. Markey: Let's take a closer look at the directors with supposed safety expertise. One board member with "safety expertise" was, until her retirement yesterday, the ceo of duke energy and was previously a senior partner at arthur anderson, the accounting firm, indicted after the enron scandal.
▶ 1:51:43Sen. Markey: Another board member with "safety expertise is the ceo of a bio farmer company who previously served on the board of directors at north and spent nearly two decades at morgan stanley. Mr. ortberg, in your view do those board members have "safety expertise"?
▶ 1:52:04Mr. Ortberg: Those board members provide very good input on safety. It's not aerospace safety, granted, but for us to be able to learn on how pharma treats safety is very interesting. To have board members who can provide different perspectives on how they treat safety in different industries, clearly the energy industry, how they treated is very important to their business.
▶ 1:52:34Mr. Ortberg: We view having a diverse set of inputs into that helps us to think through and benchmark what other people are doing in this area and see if there are better ways for us to do it.
▶ 1:52:47Chair Cruz: In my opinion, --
▶ 1:52:49Sen. Markey: In my opinion, that makes every person in america a safety expert. They could bring the perspective of their industry into your boardroom. I think that's absolutely not accurate. There has to be particular expertise of the aerodynamics that are at the heart of your industry. That is a very, very specialized kind of safety knowledge.
▶ 1:53:21Sen. Markey: So, there is no way that these board members should qualify as safety experts any more than any other? More than any other industry should. I noticed that boeing has added individuals with expertise in overseeing important organizations.
▶ 1:53:42Sen. Markey: His board still includes -- the boeing board includes numerous financial professionals and no representatives from the workforce. Financial engineering and real engineering, never between shall meet. They are two different concepts altogether. Let me address this from a different perspective.
▶ 1:54:06Sen. Markey: The faa delegated authority to boeing to conduct certain safety compliance oversight on their design and manufacturing processes. In return for that delegation the come -- they should be comfortable that prioritizing safety occurs at all levels. Without representation on the board of directors, boeing is still flying blind.
▶ 1:54:30Sen. Markey: You don't have the worker who is there on the board giving the insights the board should hear about whatever safety defects are potentially going to rise. Again, the board should not be shielded from hearing this directly. Mr.
▶ 1:54:47Sen. Markey: Ortberg, do you agree that companies like boeing that have been delegated, delegated the oversight authority by the faa, you are given essentially a take-home exam, that you shouldn't include representatives of the workforce on the board of directors to make sure you are hearing their voices on an ongoing basis?
▶ 1:55:12Mr. Ortberg: At every board meeting we have an aerospace safety committee that goes through all safety issues. The input comes from anywhere in the company, including our labor workforce. I do believe that the message is coming through. I think that the message is analyzed and the board takes it very, very seriously.
▶ 1:55:37Sen. Markey: From my perspective, that is not enough. The board members themselves should be hearing on safety issues. They are directing it in every board meeting. I think it is a fair trade.
▶ 1:56:00Sen. Markey: Boeing received some authority to self regulate, while creating structures on its board to make sure it's priority is its safety. That's why today I'm introduced with the safety starts at the top act, requiring major ager -- aerospace manufacturers delegated regulatory oversight from the faa to include multiple labor representatives and safety experts on their board of directors. Safety must start at the top.
▶ 1:56:33Sen. Markey: The top is the boeing board of directors. Safety must be in the room. Expertise must be in the room. I am looking forward to working with my colleagues to ensure that that kind of representation is there. Thank you, Mr. chairman. Thank you, Mr..
▶ 1:56:52Chair Cruz: Senator markey, thank you. Senator rosen?
▶ 1:56:58Senator Rosen: Thank you, I want to appreciate that -- I appreciate that and I want to thank the chair and ranking member for holding this important hearing today. Last year, this committee held a hearing to discuss the findings and recommendations issued by the organization designation authorization oda, expert review panel.
▶ 1:57:24Senator Rosen: Input from pilots was neither consistently or directly delivered to the highest levels of decision-makers in the organ -- organization. I think it's essential to make sure pilots have a seat not just at the cockpit, but at the table so that we ensure their expertise guides and enhances airline safety.
▶ 1:57:45Senator Rosen: It's why I am glad to see that in the summary of the new safety quality plan, boeing committed to elevating human factors in strengthening the role of pilots in the design process. Mr. ortberg, how it has the will of pilots in the design process changed since the review? What are you doing differently now? How can we ensure that there is meaningful and consistent input from pilots integrated and prioritized into the design process?
▶ 1:58:15Mr. Ortberg: First of all, I agree with the premise of your discussion. We really do need to have strong input from the pilots in the design and operation of the aircraft.
▶ 1:58:30Mr. Ortberg: We have changed our organization and added human factors, like a chief engineer, a pilot who spends time understanding the interaction between the pilot and the aircraft, in all of the design aspects of the airplane as well as the operational aspects. Looking at our manuals, looking at our fault trees to make sure that from a pilot's perspective how that would, how the interaction with the aircraft would happen.
▶ 1:59:00Mr. Ortberg: I think this is an area that would help the overall improved safety going forward.
▶ 1:59:04Sen. Rosen: I do agree. At the end of the day the pilot, that crew, that emergency might happen, it happens like this. There has to be that way that that integration works. So, thank you. I want to also talk about retaliation and its impact on safety.
▶ 1:59:23Sen. Rosen: The oda expert panel report last year found instances where boeing supervisors worked on annual assessments, self audits, or investigative processes that could represent a conflict of interest. It could erode independence or compromise the commitment to a non-retaliatory and impartial environment for their workforce.
▶ 1:59:46Sen. Rosen: Throughout the report, those folks interviewed gave examples of the consequences of raising concerns, over potential interference and retaliation from managers and supervisors. It's not acceptable. Not acceptable. So, again, do you have confidence that boeing is now taking the necessary steps to implement systems that provide workers with multiple channels for raising concerns?
▶ 2:00:14Sen. Rosen: It's really important that they are addressed without fear of retaliation, as well as creating a culture of encouraging and incentivizing safety at every level. It is just so important that each piece of the puzzle, if somebody has a concern, that they are able to raise it without fear of retaliation. I can't stress this enough. As you know, lives are on the line.
▶ 2:00:44Mr. Ortberg: I think it's absolutely critical that we have that environment. We did take feedback and have changed the organization structure to address that specific issue to provide more independence from the's -- the oda's, which could apply pressure. I think we have severely addressed the concerns outlined in the report.
▶ 2:01:15Mr. Ortberg: We have added an ombudsman as well, which gives them someone to go talk to if they see something or if they are concerned about bringing up an issue. We think that that has been having a good affect as well. I believe that we are addressing those issues, but we will continue to monitor it and if we have to make more changes, we will do that. I absolutely agree with you.
▶ 2:01:39Mr. Ortberg: People need to be free to make the right decisions without any kind of overt pressure from management.
▶ 2:01:46Sen. Rosen: I have one brief question if you could be brief about it. You talked about rebuilding your human factors, expertise. Not everything can be done by ai, artificial intelligence, machines and all that. We still need to be engaged. How is the process of rebuilding this capability of human factor going at boeing?
▶ 2:02:08Mr. Ortberg: We just stood up this organization. It's an organization filled with pilots. We have also developed what we call kneecaps, they are cockpits that they can go fly. They fly designs. We have potential design implementation.
▶ 2:02:28Mr. Ortberg: They go fly those to look and understand what the pilot implication is early in the design phase so that they can drive human factors into the design. We don't have to deal with it later on after the design is done. I do think we are making really good changes to get more of that up front in the design development process. We are feeling with world-class people who are very expert at flying aircraft.
▶ 2:02:59Sen. Rosen: Thank you. I yelled back.
▶ 2:03:03Chair Cruz: Senator blunt rochester?
▶ 2:03:10Senator Blunt Rochester: Thank you, Mr. chairman. I really appreciate the convening of this hearing. As a senator who represents individuals who perished in the most recent flight in washington, D.C., this hearing about aviation and safety is critical to all americans and in our ability to have confidence in flying. Mr.
▶ 2:03:35Senator Blunt Rochester: Ortberg, thank you so much for taking the time to speak with me prior to the hearing as well. I want to focus my questions on workforce. I served in the state of delaware as head of state personnel. So, I understand the challenges and the importance of hiring, firing, retention, and culture, as you have talked about.
▶ 2:04:01Senator Blunt Rochester: The fact that we have an aging population in this country, that really impacts retirements and workforce and succession planning. The boeing workforce, their engineers, their machinists, their safety inspectors are the backbone of the company possibility to manufacture safe and reliable aircraft.
▶ 2:04:24Senator Blunt Rochester: However, recent safety concerns and production delays coupled with over 4000 layoffs in november and december of 2020 four suggests that the boeing workforce may not be adequately supported, trained, or staffed to meet the company's own quality and safety commitments. From my understanding, if I were to order an airplane today, it could take over a decade for it to be delivered, suggesting major challenges in the production pipeline.
▶ 2:04:56Senator Blunt Rochester: Test challenges that may stem from workforce shortages or from training gaps. Talk to me a little bit about workforce planning. How do you -- current and workforce shortages affecting the ability of the company to maintain its safety and production standards.
▶ 2:05:17Mr. Ortberg: Senator, one great thing we have is that our mission is awesome and people want to work for the boeing company. So, we really don't have a challenge of attracting people who want to work for the boeing company. I think that where our challenge is is we're are making sure that we can train them. You know, the kids of today are more digital than mechanical. That means a different set of training curriculum for when we bring them into the company.
▶ 2:05:48Mr. Ortberg: Our retention is quite high, for all the challenges we have had that is actually good. My focus right now on our employees is engagement, better communication, and, you know, helping to train them to do their jobs more effectively. I think that if we continue to do that, our mission will remain awesome. We will be able to recruit who we need to to make the company successful.
▶ 2:06:17Sen. Blunt Rochester: To be clear, there are no areas where you are seeing workforce shortages or challenges? As state personnel director, we were challenged with, again, people leaving, the talent, the brain drain. You don't see that in any areas like safety?
▶ 2:06:36Mr. Ortberg: I saw that much more so five years ago than today. I'm sure there's a pocket within the company where we need some additional resources. In the main, I don't see any major resource gaps for us to execute our plans.
▶ 2:06:55Mr. Ortberg: >> as a follow-up, it would be helpful if you could go back and share with us if there are any particular areas, as I am also on the committee that works on labor, so looking at education, labor, making sure there is a real pipeline is important to us. The faa and the ntsb rely on boeing to maintain strict internal safety reviews.
▶ 2:07:20Mr. Ortberg: However, every company has employees that make difficult workforce decisions, like retiring and seeking other employment. Again, just ensuring that your new hires, can you talk more about how you are adequately training new hires to prepare them to uphold your safety commitments?
▶ 2:07:42Mr. Ortberg: Senator, this has been a big part of the safety equality planned with the faa, the additional training. We added an additional 550 hours of curriculum to the training, because we found some gaps in what we were training. On average, we have increased the training program by about 20 hours, from say around 122 around 140.
▶ 2:08:07Mr. Ortberg: We are increasing the training and adding competency evaluations for our employees before they get on to an airplane and start doing work to make sure they are competent in the work they have to do. If they don't? We will make sure they are trained to do the actual work. We have also kind of changed how we are training.
▶ 2:08:33Mr. Ortberg: In a lot of cases we found we were training people in a laboratory and it didn't actually replicate the environment in which they would go out and build the airplane. So, we brought actual airplane parts and tried to replicate much more of the actual work they will eventually be doing in their training program.
▶ 2:08:53Sen. Blunt Rochester: I would close with, as I shared with you, some of my constituents work at ridley park and they take great pride in their work. They have been fortunate to have good union leadership, with good leadership, who advocated for safety and other conditions.
▶ 2:09:18Sen. Blunt Rochester: I would love to follow up with you on your relationship with labor unions, increased autumn is asian. The steps you have taken to sustain union jobs for the long term.
▶ 2:09:29Chair Cruz: Senator?
▶ 2:09:33Senator Young: Thank you, Mr. chairman. Mr. ortberg, great to have you here today. I appreciated the phone call from just days ago and I want to learn more in coming days, weeks, and months around your new strategy for improvement. You have done a good job answering questions today. As we discussed, there has been a public loss of trust due to systemic issues that put lives at risk.
▶ 2:10:04Senator Young: I get the sense from our conversation plus your answers to questions today that you realize you are committed to changing this and that we are here, to the extent we can be constructive in the effort, critically or supportively in making sure that you succeed.
▶ 2:10:28Senator Young: Relatedly, ai automation and data analytics has the potential to revolutionize production, not just in the aerospace industry, but also seemingly every other facet of life, certainly in manufacturing. I would like to understand what concrete steps boeing is taking to ensure that these tools of the digital economy aren't just in place, but are going to make a measurable difference in preventing defects, predicting
▶ 2:10:58Senator Young: Failures, restoring public confidence in your aircraft. Has boeing integrated ai or automation to detect defects before planes are delivered to customers? And if so, how effective has it been so far?
▶ 2:11:14Mr. Ortberg: We generally use large language models, we are using them right now to enhance our assembly instructions in our documentation to make sure that it is clear, more concise, and that will help with the overall safety and quality of the aircraft. I know we are doing data analytics as well using ai algorithms.
▶ 2:11:41Mr. Ortberg: I'm not an expert on that, I cannot give you too many details, but I certainly could look into that and get back with you. I assure you that our team is looking at how to utilize ai to do the data analytics, to find and predict trends and improve the overall performance of the aircraft.
▶ 2:12:02Sen. Young: That's great. It will be important to your customers, the broader public, and your employees moving forward. You have 8000 direct and indirect jobs that your company supports just in the state of indiana alone. I want to thank you for that. Almost a half of a billion dollars in economic impact on our state.
▶ 2:12:24Sen. Young: In light of new tools like ai and automation, can you speak to the steps that boeing is taking to make sure employees are adequately trained and prepared for the future of aerospace in which we all anticipate bringing more safety to the operations, and things that we manufacture as well?
▶ 2:12:45Mr. Ortberg: Within our engineering organization in the company we have expertise in ai. We have our own internal ai algorithms, no external we have a training program in which we utilize engineers and teaching them how to utilize the tools in everyday tasks.
▶ 2:13:14Mr. Ortberg: How do you design a circuit card? They utilize these on a day in day out basis.
▶ 2:13:29Sen. Young: If there are things we can do to change training programs and even better prepare our young people for these jobs of tomorrow, which increasingly seen here today, with changes in the technology and the workforce. Things are changing quickly. We want to keep up the best we can.
▶ 2:13:57Sen. Young: Please don't hesitate to work with members of this committee to optimize or replace those programs if necessary. How is boeing leveraging data analytics for preventing future failures. Something you can speak to?
▶ 2:14:18Mr. Ortberg: We have a program called the costs program, we work with our airline customers where they give data to us. We have a large base of airline customers. Not everyone reports, but most of them do. It allows us to analyze events, look for trends, follow up on safety issues with the, with the airlines. It's been very effective.
▶ 2:14:46Mr. Ortberg: As I mentioned earlier, we are stepping up our efforts in the analytics to look for more trends using ai tools to sort through the data to see if there are trends or things that we, we cannot see with the human eye to make sure that we are identifying those before they turn into an incident.
▶ 2:15:05Sen. Young: Thank. Mr. chairman?
▶ 2:15:08Chair Cruz: I will now call and myself. Thank you, senator. Good to see you, Mr. ortberg. Enjoyed the visit. We had something to celebrate when we talked about that. We can talk more about that. One of the things I found fascinating about our conversation as it relates to this hearing more specifically is the culture shift. Right?
▶ 2:15:36Chair Cruz: The transition from different divisions, maybe some different silos to a more team oriented spirit. Can you talk more about what that looks like, practically, as you guys have made some internal decisions about that?
▶ 2:15:49Mr. Ortberg: Yeah, so culture is important and in some cases we are too isolated as people stay in their swim lanes and organizational lanes. Everything we do is team-based. To be the most effective, we need people working across organizational boundaries who feel comfortable to do that.
▶ 2:16:16Mr. Ortberg: So, we are off on a big effort to change the culture of the company. That starts with values and behaviors and how we reward people and how we evaluate people and how we select people. It's going to be a big year for us in the overall culture change. I will tell you one thing that excites me is the employees of the company are the ones who want to see the company culture change.
▶ 2:16:44Mr. Ortberg: They recognize that we need to be better and how we work together. I think we have got the case for change really nailed. We have to do the hard work of making sure we walk the walk and talk the talk and get people in the right positions.
▶ 2:16:59Chair Schmitt: You obviously work with a lot of vendors and suppliers across the country. In light of this hearing, what are some of the things you are doing to ensure the highest quality, safety, those sorts of things.
▶ 2:17:13Mr. Ortberg: It includes our supply chain. One of the major efforts is reducing the number of defects we are bringing into the factory from the supply chain and reducing the number of times when a vendor might call us up to say I found something. It escaped the factory. Major activities. One, stronger first article inspection.
▶ 2:17:44Mr. Ortberg: Doing firstarticle inspections n doing firstarticle inspections u so when you another, one factory into another, reevaluating the first article to make sure that something did not happen in that transition. We have one thousand activities underway or 1000 vendor engagements underway right now to support safety and the quality of deliveries from our supply chain.
▶ 2:18:13Mr. Ortberg: And we are seeing better performance. I mentioned earlier the fuselages that we did for spirit air, 56% reduction in the number of defects that we were having to do repair on in our factories, facilities. We've got more work to do there, but I do think getting the root cause and getting the defects out of our supply chain is just as important as our production system.
▶ 2:18:40Chair Schmitt: Switching gears just a little bit, something that obviously, I served on the armed services committee, and, you know, the next generation air defense, our dominance, the program, you know, whether or not the administration was going to move forward, sort of paused in the previous administration, and then with the nexgen fighter was going to look like.
▶ 2:19:07Chair Schmitt: We got clearly about 10 days ago, and I just could not be more thrilled. You know, of course, st. Louis is the hub of operations on the military side. Thousands of jobs. I know everyone is excited about that, not just for our country but in missouri. Can you just talk a little bit about that program and how you see that playing in this architecture of our national defense?
▶ 2:19:35Mr. Ortberg: Well, first of all, this contract was very important to the boeing company. In fact, I'm going to st. Louis tonight to go congratulate the team on this very large win, and we are honored to be given this opportunity. Our fighter business in st. Louis is historically legacy fighters. As you know, the f-18 is reaching toward the end of its life.
▶ 2:20:01Mr. Ortberg: So this is an important program for us to continue our fighter franchise in st. Louis, and we will, you know, create jobs and opportunities for a long time coming. So we are very pleased to have that.
▶ 2:20:15Chair Schmitt: We are happy and pleased to work with you on that as well. Mr. chairman?
▶ 2:20:26Chair Cruz: Thank you, senator schmitt. A safe approach to the adjustment with boeing, following the alaska airlines 1282 incident. As boeing continues to monitor, begins to increase in production as appropriate, it will likely grow more autonomous in its internal oversight.
▶ 2:20:50Chair Cruz: As boeing regains economy and eventually increases production caps, how will boeing guarantee safety without enhanced faa oversight?
▶ 2:21:00Mr. Ortberg: Senator, I'm not aware of increased autonomy that will come as we increase production rights. We are going to continue to provide transparency to the faa on all those key performance indicators. We will go through a series of production increases. The first one capped at 38.
▶ 2:21:21Mr. Ortberg: But we will go through the same process for every subsequent rate increase, and if the kci's aren't showing that we are meeting the performance, then we won't move forward with a rate increase. I think this is a good practice. It's data-driven, it's not subjective. We agreed with our regulator on what things we need to be measuring.
▶ 2:21:43Mr. Ortberg: If we find we need to adjust that, we will do that, but I think getting to a data-driven process, I think, helps them also have insight and prioritize where they should focus. Our key indicators in one area are not good, that allows them to say ok, we need to put more oversight in that particular area, because we need stability in the production system.
▶ 2:22:09Mr. Ortberg: So, again, I think the system we have in place, the plan we have in place will be effective not just for the near term before the long term.
▶ 2:22:17Chair Cruz: Since you become the chief executive officer at boeing, there have been significant changes at the board and in the leadership. As the leadership changes, it's about the culture at boeing. What personnel changes have been made at boeing, and how have these impacted the safety culture?
▶ 2:22:35Mr. Ortberg: Well, in my opening remarks, senator, I made the comment that we made massive organizational changes. If you go back to the door plug timeframe, the timeframe that changes, we got a new chairman of our board, we've got a new ceo, we've got a new head of our boeing commercial airplanes, we have new people in many of the program management roles, and so we are changing, as we are changing the culture, we are also changing people to make sure they are focused on safety
▶ 2:23:08Mr. Ortberg: And quality as a foundation and as a company. So far, I would say the results are showing good results. We will continue to refine either promoting different people, bringing some additional people from the outside to help us on our journey, but I think the progress we've made so far looks like we are getting the results we want.
▶ 2:23:30Chair Cruz: Ranking member canton. Sen.
▶ 2:23:47Canton: Thank you. What about the settlements with the families of the victims? Are you concerned about that? Do you have a problem with that?
▶ 2:23:57Mr. Ortberg: Senator, as I'm sure you are aware, the agreement was not accepted by the core, and so we are in the process right now of going back with adia -- with the doj. Look, I want this resolved as fast as anybody. We are still in these discussions.
▶ 2:24:25Sen. Cantwell: Do you have a problem with the corporate monitor?
▶ 2:24:28Mr. Ortberg: Senator, I don't want to prejudge with the outcome of those discussions are going to be. I don't personally have a problem, no.
▶ 2:24:35Sen. Cantwell: Ok. I mentioned in my statement thermoplastics. Do you see this thermoplastic's as a really game changing manufacturing, technology focus? Is it really what people are saying? Is it really something that we as a nation have to get focused on?
▶ 2:25:02Sen. Cantwell: By that I mean, healing of the workforce, test betting technology, being ready for the next big aviation change.
▶ 2:25:13Mr. Ortberg: Yes , senator, first of all, I appreciate your leadership in this particular area and the work you've done in washington.
▶ 2:25:22Sen. Cantwell: From the supply chain the data.
▶ 2:25:25Mr. Ortberg: Yeah. No, I think thermoplastics offer a huge advantage for the future and probably more streamlined with production of the aircraft, so I think it is an important, one of those major important technology areas. We should be investing in. I think it will find its way into many applications in the future aircraft environment.
▶ 2:25:48Sen. Cantwell: But do you see it as something that we, if we neglect, that we could fall behind in, as a nation, juxtaposed with other countries? I mentioned earlier the demand for 40,000 plans worldwide. That is unbelievable.
▶ 2:26:06Sen. Cantwell: If we are somewhere as a nation about 2 million, I think we've come up with this number of 2 million impacted workers in aviation in general, but if you think about what 40 million, I mean 40,000 planes represents, it's a huge demand and grace. -- increased. But if getting part of that is doing the right innovation and investment. We've always looked at that insight get the safety right, focus on innovation.
▶ 2:26:32Sen. Cantwell: Don't cut the safety first, if they are just doing inspection on these critical parts, get the innovation right. Is it really that big of an innovation seachange, I guess is the question, juxtaposed to that demand, or could we wake up in five years and find ourselves way behind?
▶ 2:26:46Mr. Ortberg: Senator, I think in general we are a little behind. I think europe has invested probably more than we have in general in this particular -- I don't think we are behind in a way that we can't recover. I do think it is an area that we need to continue to have overall focus not just as the boeing company but, you know, in terms of new technology evolution within the country.
▶ 2:27:13Mr. Ortberg: And I think they're both -- I think thermoplastics is in an area that can differentiate a lot of different product applications. I support your efforts for sure.
▶ 2:27:21Sen. Cantwell: Yeah. And just, again, on the workforce side, this is a big opportunity for a lot of jobs in the united states, is it not? Are you continuing to grow?
▶ 2:27:32Mr. Ortberg: Yeah. I think so. What you will see is thermoplastics will replace typical metal applications, and as you know, how we do that is a totally different manufacturing process. So we will have to learn how to do that, we will have to train applications, a different workforce to utilize thermoplastics, you know,, you know,, so I think we are on that journey, but we have a lot of work to do.
▶ 2:28:02Sen. Cantwell: Thank you. Thank you, Mr. chairman.
▶ 2:28:05Chair Cruz: Thank you, Mr. ortberg, for your testimony here today can senators will have close of business on wednesday, april and I submit questions for the record. The witness will have until close of business wednesday, april 23, to respond to those questions. This concludes today's hearing. The committee stands adjourned.
▶ 2:28:41Chair Cruz: [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]