Some Boeing Jets Have Substandard Parts, Whistleblower Claims

March 26, 2019 Updated: March 27, 2019

As investigations of the crashes of two Boeing 737 MAX jetliners continue, a former supply chain manager of the contractor for Boeing’s flight control systems says that substandard parts made in China with non-aerospace material have been installed in 777 and 737 planes that are still in service.

Now, the whistleblower, Charles (Chaosheng) Shi, is intensifying his efforts to bring light to the issue, which has been troubling him for three years.

Shi worked for Moog Aircraft for 10 years, from 2006 to 2016. In 2006, he set up the Moog supply chain in China and almost all suppliers were audited and approved by him, except for the one he’s now accusing of providing substandard parts.

He has tried to bring his concerns about the faulty parts to the attention of Moog, Boeing, the U.S. Federal Aviation Administration (FAA), U.S. Department of Transportation, the U.S. Congress, and President Donald Trump. The FAA found that two of Shi’s concerns were substantiated, while others were not.

He also reported the issue to Chinese authorities, including Chinese leader Xi Jinping, the Civil Aviation Administration of China, and even the Shanghai Public Security Bureau.

In an interview with NBC in February 2018, Shi expressed concern that Boeing parts supplied by Moog were outsourced to a third-party Chinese supplier that used cut-rate manufacturing processes.

Shi said, “You need to bake the parts to get the hydrogen out of the parts, so the parts can still be solid with integrity. Otherwise, the hydrogen goes into the parts. That can make the parts brittle, so the parts can fail.”

He also related to NBC an additional violation that was substantiated by the FAA, concerning unbaked parts in Boeing 777 spoilers: a hydrogen embrittlement hazard that might cause the parts and system to fail during flight.

Shi told The Epoch Times that the parts in question are mainly components in the Boeing 777 and 737 spoiler systems, which are deployed during takeoff, early flight, and landing.

Alarming Findings

Shi said he became aware in 2015 that Suzhou New Hongji Precision Parts Co. (NHJ) in Jiangsu Province, China, one of Moog’s suppliers, was reportedly using cheap and substandard materials. He confirmed that with another aviation manufacturer, B/E Aerospace, the sole source for lavatories on Boeing 737 aircraft built since 2012, and the only other aerospace customer of NHJ.

B/E Aerospace stopped buying from NHJ in 2013, after it was found that NHJ faked raw material certificates and used substitute materials, resulting in B/E product failures, Shi said.

As the manager for Moog Aircraft, Shi said he was responsible for the quality of the parts and materials that were purchased from all suppliers, and had the right to audit those suppliers.

Shi later told the FAA that he believed, based on his investigation, that NHJ had faked the raw material purchase record, and outsourced parts for Moog to an unknown supplier.

“NHJ was outsourcing Moog/Boeing business to other unknown and unapproved sub-contractors. One-third of Moog’s business, which was Boeing plane parts, was outsourced to illicit sub-contractors during 2015-2017. And I am willing to testify to this under oath,” Shi told The Epoch Times.

FAA Investigation

Shi’s discovery of the outsourcing was confirmed by an FAA investigation conducted in September 2016. According to an FAA memorandum, obtained through a Freedom of Information Act request, two allegations made by Shi were found “substantiated”:

  1. “Moog’s supplier NHJ outsourced Moog machined parts to an unknown supplier.
  2. “Shenhai, a NHJ subcontractor, did not properly bake parts both before and after the cadmium plating process, and forged the production process card. The improperly baked parts consisted of four different part numbers.”

However, Shi’s seven other allegations were found “not substantiated” by the same investigation.

According to the FAA memorandum, “Moog auditors identified the following nonconformance issues:

“(a) Required stress relief (baking) was not performed prior to cadmium plating;

“(b) Hydrogen embrittlement relief treatment (baking) after cadmium plating was performed for only 4 hours on all parts, not 8 hours as required per AMS-QQ-P-416C specification;

“(c) Baking procedure controls were not per AMS2750 specification; and

“(d) No records of furnace traces [times] were being maintained for more than one week.”

The FAA investigation also confirmed that “273 discrepant parts delivered to Boeing were installed into spoilers on the Boeing 777 aircraft.”

Safety Critical

Of greatest concern to Shi is that many NHJ parts are “safety sensitive,” and one is “safety critical.”

One part (Part number: P665A0039–02) is the blocking or mounting lug of the Boeing 737’s spoiler. This is a “Single Point Of Failure (SPOF)” part; if this part fails, the entire system will fail, which may cause a fatal accident.

According to a purchase list provided by Shi, Moog has bought 6986 SPOF parts from NHJ during 2015-2017. Shi said these parts can be used to equip more than 600 aircraft, as each 737 uses 10 pieces.

Shi said Moog is the exclusive supplier for all models of the Boeing 737, including the Max planes, and NHJ is the only supplier for this SPOF part for the 737 spoiler. His conservative estimate is that 500 Boeing planes may have been compromised, and are still in service.

When contacted by the Epoch Times, Moog denied Shi’s allegations with this one-sentence statement: “In response to your request, please note that the Moog parts Mr. Shi references are not on the 737 MAX.”

The Epoch Times submitted a follow-up inquiry to Moog, with a list of 58 different NHJ parts purchased by Moog, and asked Moog to clarify and verify on which planes these parts are used.

Moog hasn’t responded to the request.

Shi said, “The motive of NHJ’s using substitute material was that the substitute material was one-third or even one-half cheaper.”

NHJ couldn’t be reached for comment.

‘Serious Safety Threat’

Shi said he first became concerned about the parts in May 2015, when two of his supplier development engineers told him that NHJ had a bad history and B/E Aerospace stopped using the company. He became worried and reported that to his direct supervisor. But his supervisor, who had brought in NHJ as a supplier for Moog, brushed it off.

Shi also conducted some auditing and investigative work, finding that NHJ was using an “illicit material booking MID system (Material Identification),” which violated aerospace industry standards. NHJ MID numbers had no traceability to raw material sourced from approved raw material vendors.

“This violation is totally not acceptable,” Shi said.

Shi also traveled to NHJ a few times after the discovery of the faulty recordkeeping, and found that NHJ stocked raw material for Moog in an open area. That material was mixed with other supplies and was improperly labeled, he said. Some material was labeled; some was not.

Shi also found that some “work in process” paperwork didn’t have MID “traceability,” which means that NHJ had no traceability in its manufacturing process.

On Aug. 7, 2015, Shi became a whistleblower within his company, by bringing the issue to global supply chain management of Moog Aircraft.

Shi said he later found that NHJ used faked certificates to fabricate quantities of products they purchased from an approved vendor. He said he was able to determine that from a document he obtained from the approved vendor, showing the quantity of how many units it sold to NHJ, which was only one-third of what NHJ claimed that they had bought.

On Jan. 12, 2016, Shi alerted the president of Moog Aircraft and the CEO of Moog Inc., the parent of Moog Aircraft, about the “alarming safety threat.” The next day, Shi took the matter to the U.S. FAA. That was also the day he was fired.

According to Reuters, Moog said Shi’s employment was ended as part of a “previously communicated global reorganization,” and wasn’t related to him raising issues about the supplier’s quality.

According to the FAA memorandum, after receiving Shi’s report, the FAA investigator visited the Moog plant in East Aurora, New York, on March 29, 2016, and interviewed Moog employees “who were most familiar with the process.” After reviewing materials provided by Moog, and witnessing “retesting of the materials properties of parts,” the FAA concluded that Shi’s allegation was “not substantiated.”

In August 2016, Shi provided what he describes as additional “compelling” evidence to the FAA. He told the agency about NHJ faking documents about SPOF parts, which were used in the Boeing 737 spoiler, and requested that the FAA reopen the case.

The FAA did another round of investigation and found two items out of Shi’s nine allegations were “substantiated.”

According to the FAA, in response to the substantiated allegation that NHJ had provided improperly manufactured parts, Moog’s product engineering team chose six parts from the suspect lots and “subjected them to high sustained stress load testing.” There were “no noted failures.” Moog recommended “use as is” for the parts that had already been installed on Boeing planes, which Boeing accepted.

Regarding Shi’s claim that NHJ had faked its record of purchases of raw materials, the FAA reports that Moog discovered an “accounting error” that resulted in the discrepancy, which resulted in the agency determining this allegation wasn’t substantiated.

Shi says he’s not satisfied with FAA’s handling of the matter, especially the substantiated allegations. He found himself “to be in disbelief that the FAA decided to let these admittedly unauthorized and literally unbaked parts to remain in service, sparing Moog and/or Boeing millions of dollars for removal and retrofitting.”

In response to the Epoch Times’ request for information and comment regarding Shi’s allegations, the FAA emailed the following statement:

“The FAA closed its Moog investigation regarding Mr. Shi’s allegations. The agency determined the corrective action defined by Moog and Boeing associated with the open substantiated allegation was appropriate to address the related issues identified in the investigation. The FAA investigation determined unsafe conditions did not exist.”

Boeing hasn’t responded to requests for comment.

A Late-Night Intrusion

Shi says his allegations that NHJ faked documents and used inferior materials should be referred to criminal investigators, which he said he has repeatedly asked the FAA to do.

After the recent Boeing 737 Max crashes, he has stepped up his efforts by writing to U.S. Rep. Peter DeFazio (D-Ore.) and Rep. Brian Mast (R-Fla.), as well as President Trump. He said he’s willing to travel to the United States at his own cost to testify to Congress, should Congress decide to hold a hearing on this.

Shi has also taken to social media and Change.org to expose the issues and to draw public attention. He hopes more mainstream media can take up his story.

Shi said his home in Shanghai was entered in a disturbing manner on March 13.

“It was the security guard who told me my doors were open. I went down to check two doors, one was the courtyard entrance door in the north, one was the door to my townhouse in the south. Both were wide open. I called police and the fact was recorded by policemen who rushed to my home. The doors were intact but wide open. Nothing got lost. All things were in a tidy state.”

Shi believes that incident was a warning, with the intruders demonstrating how easily they could reach him. They want him, he said, to stop his efforts to expose the problems with NHJ’s parts.

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