Boeing Was Just Hit With a $12 Million Fine

December 23, 2015, 3:27 PM UTC
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EVERETT, WASHINGTON - JUNE 13: A Boieng 747-8 sits on a assembly line June 13, 2012 at the Boeing Factory in Everett, Washington. (Photo by Stephen Brashear/Getty Images)
Photograph by Stephen Brashear — Getty Images

Boeing has agreed to pay $12 million as part of a settlement with federal regulators over a series of quality control and compliance-related issues.

The settlement is the second largest for regulatory violations in the history of the FAA, according to the Seattle Times, and it settles two cases. The first involves Boeing’s (BA) lateness in developing information for the installation of fuel tank flammability reduction equipment on its 747 and 757 aircrafts.

The second case involves insufficient action after Boeing discovered a supplier was providing incorrectly shaped fasteners for its planes, the Federal Aviation Agency said in a statement on Tuesday. Both issues, the agency said, did not create unsafe conditions for Boeing workers.

There are also 11 other matters that were settled between both parties that deal with other unspecified quality control problems and “failures to implement corrective actions for those production problems,” according to the statement.

Boeing has agreed to a list of obligations to improve its safety certification process and production quality control. Failure to implement these obligations could result in an additional fine of up to $24 million over the next five years for Boeing.

“This agreement is an important step toward ensuring that Boeing fully meets all applicable compliance standards going forward,” U.S. Transportation Secretary Anthony Foxx said in the statement.

The fine is actually less than an original proposed civic penalty of $13.57 million that regulators first issued against Boeing for failure to meet the deadline on service instructions that sought to reduce risks of fuel tank explosions. These instructions were issued after a Boeing 747 fuel tank in TWA Flight 800 exploded in mid-air in July 1996, killing 230 people on-board.

In the 2012 statement, Boeing was 301 days late in submitting instructions on how it would comply to the new rules on implementing design changes to further reduce fuel tank flammability on its 747s. It was 406 days late for a similar submission for its 757s. In total, 383 U.S.-registered Boeing planes were affected by these delays, the agency said.

In a statement, Boeing said it took responsibility for its previous actions. “Boeing believes that this agreement not only fairly resolves announced and potential civil penalty actions – most of which date back years, and two of which were previously announced in 2012 and 2013 – but also will further enhance Boeing’s self-correcting quality and compliance systems,” the statement read.