Boeing reportedly plans to slash 787 Dreamliner production; Nestle reports best sales growth in nearly five years
Fox Business Briefs: Boeing reportedly plans to slash production of its 787 Dreamliner by about half and announce job cuts; Nestle reports its best sales growth in nearly five years as shoppers stockpile everything from Purina pet food to DiGiorno pizzas to Hot Pockets.
Production problems at a Boeing Co. 787 Dreamliner factory have prompted air-safety regulators to review quality-control lapses potentially stretching back almost a decade, according to an internal government memo and people familiar with the matter.
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The planemaker has told U.S. aviation regulators that it produced certain parts at its South Carolina facilities that failed to meet its own design and manufacturing standards, according to an Aug. 31 internal Federal Aviation Administration memo reviewed by The Wall Street Journal.
As a result of "nonconforming" sections of the rear fuselage, or body of the plane, that fell short of engineering standards, according to the memo and these people, a high-level FAA review is considering mandating enhanced or accelerated inspections that could cover hundreds of jets.
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The memo, a routine update or summary of safety issues pending in the FAA's Seattle office that oversees Boeing design and manufacturing issues, says such a safety directive could cover as many as about 900 of the roughly 1,000 Dreamliners delivered since 2011.
The final language depends on the outcome of ongoing reviews by Boeing and the agency, as well as decisions by more-senior FAA officials. The extent of the review reflects that the agency's concerns are significant.
Boeing has told regulators a defect resulting from the quality lapse doesn't pose an immediate safety threat to Boeing's flagship fleet of Dreamliners, people familiar with the matter said. The wide-body jets have an excellent safety record and are frequently used on international routes. Regulators aren't preparing immediate action and haven't publicly signaled what steps they might take.
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But that slip-up combined with another recently discovered assembly-line defect prompted Boeing to take the unusual step in late August to voluntarily tell airlines to ground eight of their 787s for immediate repairs. Since then, Boeing has publicly confirmed the eight planes weren't safe to remain in service.
Both defects together led Boeing to determine the eight jets didn't meet structural-soundness "requirements for safe flight and landing," according to the FAA memo, which summarized the status of the agency's examination of the issue. Boeing also determined the second defect by itself doesn't pose an imminent safety hazard.
The extent of FAA scrutiny of Dreamliner production lapses and the period it covers haven't been reported before. The Air Current, a trade publication, earlier reported the factory lapses and August groundings of the eight planes, which are slated to end when Boeing-led teams complete fixes expected to take about two weeks.
A Boeing spokesman said the planemaker is conducting a thorough review to understand the root cause of the two defects and is inspecting newly produced airplanes before delivery. The company has fully briefed the FAA and is working closely with regulators, he added. "We are taking the appropriate steps to resolve these issues and prevent them from happening again," he said.
The FAA, in response to questions about the groundings and broader production review, has said it "is aware of the matter and continues to engage with Boeing." The agency's high-level review includes analyses of data and production parts.