The Wall Street Journal - 09.03.2020

B4| Monday, March 9, 2020 THE WALL STREET JOURNAL.**

BUSINESS NEWS WSJ.com/Tech

Calhoun said, adding that the

board had trusted Mr. Muilen-

burg and his proven record of

taking risks that had paid off.

Mr. Muilenburg couldn’t be

reached for comment.

Mr. Calhoun publicly ex-

pressed support for Mr.

Muilenburg in the months lead-

ing up to his removal in De-

cember, but the board eventu-

ally became frustrated with Mr.

Muilenburg’s overly optimistic

projections and convinced that

he had mismanaged the com-

pany’s relationship with the

FAA, potentially complicating

the plane’s return to service,

people familiar with the matter

have said.

Mr. Calhoun had become

more engaged in managing the

company after being made

chairman in October, when the

board stripped Mr. Muilenburg

of that role, but has sought to

draw a clean break from the

company’s past missteps.

“I watched the same movie

you did—I think I was in the

front-row seat, and I might

come to exactly the same con-

clusions you do,” Mr. Calhoun

said in a call with reporters in

January. “My leadership role

here at Boeing is intended to

make changes that correct a lot

of those situations.”

A Boeing spokesman said

Mr. Calhoun wanted to provide

Boeing executives with more

company for installing unap-

proved sensors on hundreds of

planes, including some MAX

jets. A Boeing spokesman said

the company has done a thor-

ough internal review and im-

plemented changes to address

the FAA’s concerns.

Mr. Calhoun told the New

York Times that the challenges

he is facing are more than he’d

anticipated, according to the

March 5 article. “And it speaks

to the weaknesses of our lead-

ership,” he said.

He said Mr. Muilenburg may

have increased production of

the 737 MAX too quickly at the

expense of quality. Mr. Calhoun

suggested that Mr. Muilenburg

had been chasing a higher

share price, according to the

article.

“I’ll never be able to judge

what motivated Dennis,

whether it was a stock price

that was going to continue to

go up and up, or whether it

was just beating the other guy

to the next rate increase,” Mr.

CEO Dave

Calhoun has

said he will

focus on

rebuilding

trust in the

company.

context about what he had said

in the interview.

“It is important to Dave that

his teammates have a full un-

derstanding of his views and

the context they were given

in,” a Boeing spokesman said.

“And like many interviews, not

everything makes it into the

story, and Dave wanted to

share some of the points he

made about the good work of

our team and the strength of

our portfolio of products and

services.”

In the message on Friday,

Mr. Calhoun said he had

wanted to speak candidly about

the company’s challenges, but

hadn’t intended to undermine

its current leadership team.

He said he was invested in

Mr. Muilenburg’s success, and

that the disappointments he

discussed in the interview

mostly related to the com-

pany’s failure to return the

plane to service going into the

fourth quarter.

“Now is not the time to look

behind us. I regret doing it.

Now is the time to look for-

ward and build on our founda-

tion,” he wrote.

Mr. Calhoun said he main-

tained his commitment to be-

ing more transparent.

“I have said that transpar-

ency is a messy process but

worth it in the end, and I still

believe it.”

flights needed to vet fixes to

MAX flight-control software

and move forward with certi-

fying the grounded jets as

safe to carry passengers

again.

Complications stemming

from mandatory wiring

changes could delay FAA di-

rectives ungrounding the be-

leaguered fleet for at least

several weeks, some of the

people said, potentially be-

yond the mid-June timeline

previously projected by in-

dustry and government offi-

cials.

The wiring concerns also

have turned into a test case

of what Dave Calhoun, Boe-

ing’s new chief executive, has

touted as his more realistic

and conciliatory approach to-

ward FAA safety demands be-

fore allowing the MAX fleet

back in the air.

The FAA said on Sunday

that it continues to engage

with Boeing on the wiring is-

sue and the MAX will return

to service only after the FAA

is satisfied that all safety-re-

lated issues are addressed.

A Boeing spokesman said

that discussions with the FAA

continue, but regardless of

the outcome the company’s

estimate for a midyear return

to service is unchanged.

If Boeing continues to

press its case in the face of

the FAA’s preliminary deci-

sion, one of the people

briefed on the deliberations

said, the likely upshot would

be months of additional de-

bate involving the FAA and

foreign regulators in Europe,

Canada and Brazil.

That is a major reason

Boeing, which already has

been devising ways to relo-

cate certain wiring, ultimately

is likely to accept the FAA’s

position. And from a public-

perception standpoint, the

people said, U.S. authorities

are loath to break with de-

mands from foreign regula-

tors that wiring fixes must be

completed before the fleet is

allowed to resume operations.

Continued from page B1

Jet Maker

Faces Snag

On Wiring

PG&E said its inspections

have uncovered the need to re-

place thousands of hooks and

other hardware showing wear

or corrosion and that all of the

highest-priority problems have

been addressed.

The hooks, about the width

of a fist, hang from the steel

towers that support transmis-

sion lines, helping to hold the

charged wires.

Windy conditions, over de-

cades, can cause the hooks to

rub against their hangers,

which can erode the metal and

increase the odds of failure.

State investigators said they

believed about 75% to 80% of

the hook that caused the Camp

Fire had worn away before it

broke.

PG&E has a poor record of

maintaining its transmission

lines and steel towers, a Wall

Street Journal investigation

last year found.

PG&E internal documents

show that it knew for years

that many of its transmission

towers had reached the end of

their useful lives, the Journal

reported last year.

In a 2017 internal presenta-

tion, the utility estimated that

its transmission towers were

an average of 68 years old.

Their mean life expectancy

was 65 years. The oldest steel

towers were 108 years old.

Plagued by shoddy records

and aging equipment, the com-

pany struggled to respond this

past decade as drought and

climate change made a tinder-

box of its service territory and

exposed the dangers of its

power grid.

Its equipment sparked 18

deadly wildfires in 2017 and

2018, killing more than 100

people, state investigators say.

The company has agreed to

a settlement with state regula-

tors probing the cause of the

Camp Fire after they found

systemic problems with its in-

spection and maintenance

practices.

The hook that failed in No-

vember 2018 was manufac-

tured by Ohio Brass Co., a

company that originally made

metal harnesses for horse-

drawn buggies before develop-

ing hardware for some of the

first transmission lines ever

built, according to court fil-

ings, historical documents and

Mr. Ramsey.

A spokesman for Hubbell

Inc., which purchased Ohio

Brass in 1978, said the com-

pany was “unable to identify

the manufacturer of the hook

in question.”

Photographs of hooks re-

moved from the tower on the

transmission line where the

fire started show Ohio Brass

markings.

Ohio Brass catalogs from

that period reviewed by the

Journal don’t describe any

warranties, and there is no ev-

idence that metal hooks manu-

factured around 1918 were ex-

pected to last a century.

“I can tell you positively

they had no idea” how long

they would last, said Doru Ste-

fanescu, a professor emeritus

of materials science at Ohio

State University who is an ex-

pert in the kind of malleable

iron used to make the hooks.

Even today, he said, “we don’t

have data to tell you what hap-

pens over 100 years.”

Court papers filed by attor-

neys representing fire victims

suing PG&E for damages de-

scribe the hooks as “all worn,

rusted, and degraded.” PG&E

inspectors, two months after

the fire, noted in an inspection

that a hook on the tower

where the fire started “is rusty

and corrosion is set on.”

The line that sparked the

Camp Fire, the Caribou-Pa-

lermo, is part of a transmis-

sion network known as the

Caribou-Valona system, built

Continued from page B1

Broken

Hook Key

To Case

around 1921 to carry hydro-

electric power from the Sierra

Nevada mountains to the Bay

Area. Hundreds of its original

steel towers are still in use.

PG&E has said in recent

court filings it didn’t track

when its hooks were installed

or how long they had been ex-

posed to weather. It also didn’t

routinely inspect them to look

for corrosion or wear. Before

the Camp Fire, PG&E inspec-

tion forms didn’t even include

space to note the condition of

hooks and other hardware.

There were reasons to be

concerned about the condition

of these hooks, records show.

In 1924, Ohio Brass stopped

selling the type of malleable

iron hooks that design docu-

ments indicate were used on

the Caribou-Palermo just a few

years earlier. Ohio Brass,

switched to a new manufactur-

ing method that produced iron

“freed from all tendency to-

ward embrittlement when hot-

dip galvanized,” according to

an article in the March 1926

edition of the Journal of the

American Institute of Electri-

cal Engineers.

In 1987, PG&E engineers no-

ticed worn hooks on the

southern portion of the 1921

transmission system. They re-

quested tests on two hooks,

which were supposed to hold

up to 30,000 pounds. Both

failed at 11,500 pounds. They

then tested a third hook that

didn’t have any signs of wear.

It failed at 6,900 pounds. One

of the hooks was made by

Ohio Brass while another was

made by a different company,

Lindsey Manufacturing Co., ac-

cording to PG&E records.

The report concluded that

PG&E should test more hooks

to determine whether they

were still dependable. In De-

cember, PG&E said in court fil-

ings it couldn’t find any re-

cords related to further

testing.

PG&E didn’t routinely climb

its transmission towers before

the Camp Fire, instead in-

specting them by ground or by

air every five years. Since the

Camp Fire, PG&E has rushed

to inspect its entire electrical

grid in search of other poten-

tially dangerous problems. In-

spectors last year spotted

more than 5,000 high-priority

safety hazards that hadn’t

been previously discovered.

Judge Alsup recently ques-

tioned PG&E’s new inspection

procedures after an expert

hired by victims’ attorneys

testified that he spotted a

worn hook on the Cresta-Rio

Oso transmission line, which

was built parallel to the Cari-

bou-Palermo around 1928. The

hook was a couple of hundred

feet from the tower where the

Camp Fire started.

Scott Hylton, a former Sac-

ramento utility lineman, testi-

fied that after he first spotted

the hook in the weeks follow-

ing the fire, he assumed PG&E

workers would replace it dur-

ing inspections. When it was

still there a year later, “I felt

an obligation to bring it for-

ward to make sure it wasn’t

missed,” he said.

PG&E inspectors had exam-

ined this tower twice last year,

once by climbing it and once

by drone. In court filings, the

company said inspectors failed

to spot the hook damage based

on the photos they took. After

looking again, they determined

the hook was about 30% worn.

PG&E’s guidelines require it to

replace hooks with 30% to 50%

wear within a year—or within

six months if they are in fire-

prone areas.

“If I had C-hooks that were

30% worn out, I’d replace

them,” Mr. Hylton said in

court.

—Erin Ailworth

contributed to this article.

‘They’re excellent

hooks if you don’t

leave them up...for

100 years.’

A broken piece of equipment believed to be key to the 2018 Camp Fire

PACIFIC GAS & ELECTRIC/ASSOCIATED PRESS

Boeing Chief Executive Dave
Calhoun told executives that he
regretted voicing criticisms of
the company’s leadership and
former CEO in a recent inter-
view with the New York Times.
Mr. Calhoun, who started as
CEO in January, is dealing with
the fallout of his candid assess-
ment of Boeing’s problems,
telling executives they have his
support despite sometimes
harsh comments published in
the article.
“I am both embarrassed and
regretful about the article,” Mr.
Calhoun wrote in a message
addressed to Boeing senior
leaders, reviewed by The Wall
Street Journal. “It suggests I
broke my promise to former
CEO Dennis Muilenburg, the
executive team and our people
that I would have their back
when it counted most. I want
to reassure you that my prom-
ise remains intact.”
Mr. Calhoun, who served on
Boeing’s board for about a de-
cade before being appointed
CEO, had vowed to make a
fresh start for the beleaguered
company. He has said he
planned to focus on rebuilding
trust in the company and being
more transparent.
Boeing has been in crisis
since two of its 737 MAX planes
crashed within a five-month pe-
riod, killing 346 people. The
MAX has been grounded world-
wide since last March and Boe-
ing had to shut down produc-
tion of the plane this year. The
crashes have drawn scrutiny of
the plane maker’s engineering
culture and damaged the com-
pany’s relationships with suppli-
ers, customers and regulators.
In a preliminary report re-
leased Friday, House investiga-
tors said production pressures,
faulty assumptions, and a “cul-
ture of concealment,” com-
bined with insufficient federal
safety oversight, led to the two
crashes.
Separately, in Boeing’s latest
reported production lapse, the
Federal Aviation Administra-
tion on Friday proposed a $19.7
million penalty against the

BYALISONSIDER
ANDANDREWTANGEL

Boeing CEO Regrets Candor

The company has been in crisis since two of its 737 MAX planes crashed within a five-month period.

ELAINE THOMPSON/ASSOCIATED PRESS

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