Boeing to pay $ 17 million to fix aircraft production issues
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Federal officials say Boeing will pay at least $ 17 million and take action to address production issues with its 737 jets, including the Max. The Federal Aviation Administration said Thursday that the regulations cover the installation of unapproved sensors and other parts on certain Boeing 737 NG and 737 Max aircraft built between 2015 and 2019.
The settlement, while not a large sum for Boeing – the company had $ 15 billion in revenue in 2020, a year on the decline – is the last black eye for the iconic American manufacturer. Boeing is still struggling to recover from two fatal crashes that led to long grounding of Max jets around the world and other issues that plagued the Max and other aircraft models.
The FAA said Boeing would pay the civil penalty of $ 17 million within 30 days and could face up to $ 10.1 million in additional fines if it does not take action, including preventing the ‘use of unapproved parts. The FAA said Boeing must also analyze whether the company and its suppliers are ready to safely increase 737 production rates.
Boeing said it had “completely solved” the problems with its production system and supply chain. “We continue to devote time and resources to improving safety and quality performance across our operations,” including ensuring employees comply with regulatory requirements, the company said. in a press release.
Shares of Chicago-based Boeing Co. rose 3% in morning trading after the CEO of its largest customer, Southwest Airlines, said the airline had an opportunity to add nearly 500 new ones. planes in the years to come. Southwest CEO Gary Kelly told the Dallas Morning News the airline would need more planes after adding new destinations and restoring its network after the coronavirus pandemic that hit travel slows down. last year.
At the same time, U.S. Trade Representative Katherine Tai said she was optimistic that the U.S. and Europe could settle a long-standing dispute over aircraft subsidies, leaving them free. to focus on more important issues, including China’s nascent aviation industry.
Tai, who is working to reestablish trade ties with his allies around the world after former President Donald Trump’s tariff wars, declined to give details of his talks with the European Union and Britain over the dispute, but took on an optimistic tone.
âIt is impossible to predict the organic development of any negotiation. But I want to stress how optimistic I am, âTai told Reuters in an interview Wednesday night. âWe give him everything we have. I am also convinced that it is happening on the other side of the table. “
European Union trade chief Valdis Dombrovskis said last week that Brussels and Washington were working to resolve the dispute over subsidies to aircraft manufacturers by July 10.
The two sides agreed in March to suspend tariffs on billions of dollars in imports amid a 16-year-old dispute at the World Trade Organization over subsidies for aircraft manufacturers Airbus and Boeing. The suspension runs until July 10, with tariffs reapplied on July 11 if there is no solution
When asked how close the two sides are, Tai simply replied, “Let’s keep our fingers crossed.”
She said she was encouraged by Dombrovskis’ leadership and partnership and would do everything in her power to create the “maximum conditions for success”.
âIt took 16 years, but we finally got here. I just want to preserve all the opportunities so that we come to a good result, âshe said, noting that China had made no secret of its ambitions to become a global player in the commercial aviation industry.
She added that in the face of this challenge, the US and the EU must “understand the things that have held our throats by our throats for a very long time so that we can turn our attention to the bigger issue.”
Tariffs on metals: Tai and his European counterparts declared a partial truce in a three-year dispute over US steel and aluminum tariffs, agreeing not to increase retaliatory tariffs.
Dombrovskis said US tariffs on metals and the EU’s initial retaliatory duties from 2018 should be removed as soon as possible, adding that both sides were working to do so by the end of 2021.
Tai, who is meeting virtually with her counterparts from the Group of Seven Wealthy Democracies this week, said the tariffs had garnered a lot of attention, but that she was focusing on formulating a new vision, a more worker-centric one. for the global economy.
Asked whether Washington would remove tariffs on steel and aluminum as Europe hopes, Mr Tai said the biggest problem was the distortion of the world market, a reference to the overproduction of China. She insisted that any solution to the metals tariff dispute should be tied to a solution to the global excess production capacity being driven by China.