The idea that an operation of Boeing’s size would not have the resources or wherewithal to spot check their suppliers on this sort of thing is just silly. The folks squeezing Boeing’s margins should know their suppliers are doing the same thing, and be suspicious of them. Either those folks were in on it with the suppliers or they just didn’t care about their own product’s quality. I’m not sure which I think is more likely. But either explanation is criminal negligence for this type of product.
Companies like Boeing generally can trace every material they get back to the mine or recycling center it came from. They won't buy if a slave was in the mine. Sure there are 7 layers of company between the mine and the company, but you still trace all those layers. This ensures not only do they not use things like slave labor, but also that the correct environmental controls are in place all down the line, and other such things.
If Boeing isn't doing the above they are at fault for the mistakes. No pushing this off on a supplier the buck stops at Boeing who could have solved this. There are other companies that do this correctly for the things they care about.
Of course you will not that many things use slave labor or don't have environmental control. The key is what companies care about.
I don't think anyone's contending that Boeing didn't have the resources. Like tons of once respectable titans of their given industry, they have had a rash of a new management structure that was of the "corporate pirate" variety, that shows up, acquires control, slashes costs across the board, does stock buybacks and bonuses regularly, makes products worse but continues trading on the name of the business for as long as possible, preferably for good but they're also quite happy to run a business firmly into the ground then sail away with their ill-gotten gains. And people contend that most of these issues, in one way or another, were down to that cost cutting. And I absolutely think it's criminal negligence but I also have severe doubts they will see any meaningful consequences. More line-item fines and firm finger wagging from the judiciary that they better not do it again, and I mean it this time.
Criminal negligence on the behalf of Boeing sounds like a stretch. If you have to verify the details of the work you outsource then everything would have to be done in house, and there would be no benefit to it. Are you criminally liable if your supplier commits fraud ?
> If you have to verify the details of the work you outsource
Yes, they have to verify. Verification is necessary whether or not the component is sourced through a supplier or in-house. Verification happens after the sourcing step. And yes, you are criminally liable in the supplier case if your supplier commits fraud and you knew about it, as is the implication here.
Are they legally bound to do the verification themselves ? Seems like it would be more cost efficient to outsource that as well, which would just be prone to fraud.
I did not see it mentioned where they were aware that their suppliers were committing fraud. At these large companies the executives only look at the spreadsheets and take the contracts as fact, regardless if a third party can deliver.
It would only make sense that they would do it. We test materials randomly at one place I went to randomly. It wasn’t every piece or every batch, but we definitely sent off materials to labs to get tested. We weren’t under the eye of anything like the FAA either, we were doing it to just ensure QA that out gearing was made with quality materials and not junk. It’s not cheap but it’s not outrageously expensive either to get metallurgy checked to make sure it’s meeting your requirements as per the mechanical design.
You are (or should be) if you took no effort to avoid the fraud for something this important. In IT, if you hire a company to handle your SSO, but don’t check that they have the required certifications verified by independent auditors for their own security you may well be on the hook when they expose your customers’ data.
I agree you should be. I don’t think our economic system enforces those checks. In practice auditing and pen testing are just farmed to the lowest cost place that says they will do everything. The system has no proper checks or balances against fraud.
You can’t outsource liability to a random Chinese supplier with no significant presence in US. Small Chinese company will sign whatever agreement you want and promise to do whatever checks you need - and then do absolutely nothing. What are you gonna do if something goes wrong? Sue them in Chinese court? Good luck.
If you want actual compliance, you have to send actual person (that you trust - it’s another big problem as that person can get bribed) in flesh and blood to verify everything and essentially be part of supplier team. That’s the only way.
I don’t believe you can do that outsourcing in good faith. However, assuming they did and were lied to, does that constitute liability I would see them arguing they are the victim.
