A new problem has been found during the production of 737 Max jets that will force Boeing to rework about 50 planes that have not yet been delivered.

The problem was disclosed in a memo sent to Boeing (BA) employees Sunday by Stan Deal, the head of the company’s commercial aircraft unit. An employee at Boeing supplier Spirit AeroSystems, which makes the fuselages of the 737 Max jets, notified the plane maker that two holes may not have been drilled exactly to Boeing’s requirements, according to Deal’s memo.

“While this potential condition is not an immediate flight safety issue and all 737’s can continue operating safely, we currently believe we will have to perform rework on about 50 undelivered airplanes,” it said.

Spirit AeroSystems confirmed in a statement that it mis-drilled the holes.

“A member of our team identified an issue that does not conform to engineering standards,” Spirit AeroSystems spokesman Joe Buccino said. “Once notified, we began immediate actions to identify and implement appropriate repair solutions. We are in close communication with Boeing on this matter.”

The news about the mis-drilled holes is just the latest blow to Boeing’s reputation, which has been battered repeatedly over the last five years, most recently by a terrifying accident aboard a 737 Max 9 flight on January 5. And in the wake of that incident, the FAA now says it will be changing the way it oversees Boeing’s manufacturing processes.

An Alaska Airlines flight had a door plug blow out that day, leaving a gaping hole in the side of the plane. While the exact cause of the incident is not yet known, Boeing CEO David Calhoun told investors on Wednesday: “We caused the problem, and we understand that.”

“Whatever conclusions are reached, Boeing is accountable for what happened. Whatever the specific cause of the accident might turn out to be, an event like this simply must not happen on an airplane that leaves one of our factories,” he continued. “We simply must be better.”

Deal’s Sunday memo said Boeing’s 737 Max factory in Renton, Washington would “dedicate several days … this week to focus on this important work, reflecting the premium we place on quality, safety and, ultimately, stability in our factories.”

Quality problems

In a cost-cutting move, Boeing has been increasingly depending on suppliers in recent years to assemble key parts of its aircraft. Spirit AeroSystems, for example, builds its fuselages and in some cases its cockpits, leaving Boeing with only final assembly of the planes that carry its name.

But this is not the only supplier delivering products to Boeing that does not meet its standards, according to Deal. He also acknowledged there are problems with planes at Boeing’s own production facilities.

During a recent day on which Boeing halted production of the 737 Max to hold a staff meeting to stress the importance of quality control, “many employees voiced frustration with … how unfinished jobs – either from our suppliers or within our factories – can ripple through the production line,” Deal wrote in the memo.

“These employees are absolutely right. We need to perform jobs at their assigned position,” he said. “We have to maintain this discipline within our four walls and we are going to hold our suppliers to the same standard.”

“We recently instructed a major supplier to hold shipments until all jobs have been completed to specification,” he said. “While this delay in shipment will affect our production schedule, it will improve overall quality and stability.”

Boeing has halted delivery on a number of occasions over the last few years involving both the Max and the 787 Dreamliner because the planes had not been built according to specifications.

The suspensions caused problems for airline customers that had been counting on the planes and also led to ongoing losses at Boeing. The company reported last week that it lost $2.2 billion in 2023, bringing losses over the last five years to $26.7 billion.

Two major customers, United Airlines and Southwest Airlines, said last month they were no longer counting on receiving their orders of new versions of the 737 Max they had been promised by Boeing.

Southwest had been expecting the 737 Max 7, while United had ordered the Max 10. Neither plane has been approved by the Federal Aviation Administration to carry passengers.

United CEO Scott Kirby said the incident on the Alaska Air flight was the “straw that broke the camel’s back,” in terms of the airline moving forward with plans to take deliveries of the Max 10 later this year as previously planned.

The most serious problem for Boeing was a design flaw in the 737 Max that led to two fatal crashes, one in October 2018 and one in March 2019, that killed a total of 346 people and led to a 20-month grounding of the aircraft.

‘Re-imagined oversight’

The mis-drilled holes are on the planes’ window frames, Jodi Baker, a FAA official in its aviation safety office, told reporters on Monday.

“We’ll ensure that those airplanes meet all safety standards before we can approve them for delivery,” she said.

The FAA has started developing a plan for “re-imagined oversight” and is asking how it “can do this job differently going forward,” said Baker. She said the plan will extend to all US aircraft manufacturers – although Boeing is the largest US plane maker and has experienced a series of quality lapses in recent years.

“We want to step up more interaction and more direct observation of the work that’s being accomplished,” she said. “Surveillance is that boots on the floor.”

Agency officials are currently determining how they would conduct this work, and Baker said in the meantime they are performing “nose to tail, wingtip to wingtip” inspections of work on Boeing’s 737 Max assembly line in Renton, Washington.

Baker said that nearly all of the 737 Max 9s grounded in the wake of the January 5 incident aboard an Alaska Airlines-operated flight are back in the air. There are eight Max 9s still parked at Alaska Airlines and one parked at United Airlines, she said. (CNN)

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