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Isa Soares Tonight

Boeing CEO Testifies Before Senate Committee; Kim Jong Un Welcomes Putin to North Korea; Biden to Shield Undocumented Spouses and Children from Deportation. Aired 2-3p ET

Aired June 18, 2024 - 14:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[14:00:00]

ISA SOARES, CNN HOST: A very warm welcome to the show, everyone, I'm Isa Soares. Tonight, Boeing's CEO faces a grilling from U.S. senators over

safety culture at the company. That hearing begins this very hour, we'll bring you all the details.

Then, U.S. President Joe Biden set to deliver a major announcement that could protect around half a million immigrant families from deportation.

We'll have more on that. Plus, Russian President Vladimir Putin has just arrived in North Korea, it's his first visit in more than two decades.

We'll explain why this visit has the West worried. But first, this hour, Boeing's reputation hangs in the balance as it's outgoing CEO, David

Calhoun faces a grilling from U.S. senators over the safety culture at the company.

A new whistleblower, Sam Mohawk alleges the plane maker hid faulty aircraft parts. CEO Dave Calhoun took over the reins following two fatal crashes of

the 737 Max. Today's hearing marks the first time Calhoun is testifying in the four years he's run the troubled company.

And you may remember this mid-air emergency from back in January where the door-plug blew out of an Alaska Airlines flight, a Boeing 737 Max 9 for

which Calhoun will also have to answer questions. And here's what the committee Chair, Senator Richard Blumenthal told CNN a little earlier. Have

a listen.

(BEGIN VIDEO CLIP)

SEN. RICHARD BLUMENTHAL (D-CT): This kind of violation of trust is part of a pattern, a broken safety culture at Boeing. The company promised it would

turn around. That safety culture after the two crashes that occurred in 2018 and 2019.

(END VIDEO CLIP)

SOARES: Well, I'm joined now by CNN aviation and transportation analyst Mary Schiavo live from Charleston in South Carolina. Mary is also an

attorney who represents families of airline crash victims and she has pending litigation against Boeing related to the 737 Max's eight crashes.

Mary, great to have you with us this hour. We are expecting, Mary, I think it's fair to say quite senators to turn up the heat, I should say, on the

seal(ph) of Boeing. Besides an apology, I'm not sure whether we're going to get that. But what we'll be looking for? What will you be looking for?

What will they, the senators be digging into? We're just looking at images coming into us now.

MARY SCHIAVO, CNN AVIATION & TRANSPORTATION ANALYST: Right, well, I think the senators are very interested in learning what is the path forward? What

are they going to do to turn Boeing around? What is going to make Boeing the company that it once was?

And how can so many things keep happening? How can they have this over and over again? How can they have so many problems? And how can so many

whistleblowers have been -- according to the whistleblowers, ignored, told to be quiet, et cetera.

The reports this morning or at least 12 have come forward, including one overnight with some very alarming details. So, I think the senators really

want to know first and foremost, what is your path forward? Because I don't think anyone's really heard that, and no leader to take over from Calhoun

is due to step down, has been even floated by names have surfaced yet. So, I think there's got a lot of questions to cover today.

SOARES: Yes, and in April, we're seeing them all sitting down, expected that to start. But in April, Boeing employees kind of turned to -- this all

based -- kind of testified that the company, Mary, put profits ahead of safety. And this morning, you were mentioning that whistleblower learned

that his claim was basically Boeing may have installed what it called questionable parts, basically defective parts on planes and hid that from

regulators.

I mean, this is a very serious allegation, and speaks perhaps to what we heard from Senator Blumenthal or perhaps a pattern of behavior. What do you

make of this?

SCHIAVO: Right, well, it's a very serious allegation and it's a very serious behavior if it's true, because when you get to that point, when you

get to the point of hiding parts that aren't certified, that aren't proper, that don't have the proper certifications that may not be the right

materials, and if you actually used them, then on aircraft, it can be a criminal offense depending upon, you know, what you knew if you knew they

were not properly certified, if you knew they were bogus parts, let's just call them what they are, unless they're certified, they're bogus parts.

[14:05:00]

If those were knowingly installed, that's a crime. And we have entered into a whole new area. It's one thing for Boeing to be laxed, you know, to be

lackadaisical about safety, et cetera. But when you get to the point where what this whistleblower says, you know, they lost track of like these bad

parts and they might have been installed. That is a very serious, if true, a very serious problem.

SOARES: Yes, and what, you know, we're looking at live images there, Senator Blumenthal just started, of course, this panel, of course, we'll

bring that to viewers in just a moment. But as you were saying, Mary, I mean manufacturing very much -- manufacturing quality, I should say very

much at the center of this, in addition to Calhoun's testimony right now on Capitol Hill.

What else are regulators doing to kind of ramp-up oversight of its production lines and address the lapses in its safety record here?

SCHIAVO: Right, well, the FAA has a -- Federal Aviation Administration of the United States has stepped up inspection. They have stepped up their

oversight, and they have not permitted Boeing to expand its assembly lines. In other words, it hasn't allowed Boeing to ramp up and produce more

aircraft than it had been before the disasters.

And of course, the United States Department of Justice, the criminal investigators are also involved. Boeing, if you recall after the crash of

Ethiopia Airlines flight 302 back in March of 2018, entered into what's called a deferred prosecution agreement, and that left them off the hook

for criminal prosecution if they complied with everything in the deferred prosecution agreement.

Now, the Justice Department has said they did not. And the Justice Department will be closely watching to see what they have done, how

egregious the violations were, and they will be making a decision whether or not to prosecute Boeing on or after July 6th. It's serious stuff --

SOARES: And as you were talking -- yes, very serious stuff, and you were talking, we had a slightly wider shot, Barry, of those -- of those at this

hearing, and I saw as well, there are several family members holding up placards with the faces, I believe from the wide shot, there we go, seeing

of their loved ones.

I think it's family members of the 157 crash victims of Boeing 737 Max, this was just moments ago. What will the Boeing -- what will they be

wanting to hear? What will the Boeing CEO have to say here at this moment as he's faced with all of those families there, right there?

SCHIAVO: Right, I mean, the Boeing CEO, I mean, I don't really know anything he can say that could make it right. He's going to apologize

without a doubt. I mean, Boeing has been on an apology tour lately, apologizing for this and that, everything went -- well, really, people want

them to do is fix it, stop apologizing --

SOARES: Yes --

SCHIAVO: And fix your problems. But the other thing that he is going to be doing is trying to reassure the Senate that they don't have to have some

oversight --

(CROSSTALK)

SOARES: Mary, I'm sorry to interrupt, Mary --

SCHIAVO: This is our flagship manufacturer.

SOARES: I apologize for interrupting you. I just want to listen in as the Boeing CEO just made his way in.

BLUMENTHAL: Dismiss, promises were made. What we've seen since from whistleblowers is that in fact, the manufacturing issues, the retaliation

against whistleblowers, non-conforming parts, quality inspections skipped and issues concealed from the FAA, evidence hidden.

All have continued, and there is mounting evidence that the deferred prosecution agreement concluded in 2021 with the United States Department

of Justice has been violated. In fact, there is near overwhelming evidence in my view as a former prosecutor that prosecution should be pursued.

When you were named as Boeing's chief executive, Mr. Calhoun, we were told that you were the right person to correct course, and you committed to,

quote, "strengthen Boeing's safety culture and rebuild trust with our customers, regulators, suppliers and the flying public".

And for a while, some started to believe that Boeing might have changed, but then this past January, the facade literally blew off the hollow shell

that had been Boeing's promises to the world. And once that chasm was exposed, we learned that there was virtually no bottom to the void that lay

below.

PSI started this investigation after current Boeing quality engineer Sam Salehpour came forward to disclose alleged shortcuts in the production of

787 and 777 aircraft that could pose catastrophic safety risks over time, fastening of the fuselage to other parts.

[14:10:00]

Mr. Salehpour courageously recounted how he was isolated and transferred for refusing to stay silent about his concerns. Our investigation has

proceeded since we first heard from him, and we have heard from many others. We have more than a dozen whistleblowers by this point, and we

encourage more to come forward.

We've collected that evidence, we've learned that Boeing's problems go deeper than one whistleblower or one incident or one line of aircraft. A

mechanic in South Carolina told us about how when he and his colleagues raised concerns about directives to not follow policies and procedures,

quote, "we were ordered to just do it and told there were hundreds of others waiting in line outside the gate wanting our jobs."

Another whistleblower from Washington State has brought us new evidence very recently, a Boeing employee, Sam Mohawk, quality assurance inspector

in Renton, Washington, informed us that "Boeing is improperly documenting" -- I'm quoting, "nonconforming parts, possibly using them and installing

them in airplanes.

There are parts that are damaged or defective, out-of-specification." He said that he's been told by his superiors to conceal this evidence from the

FAA, and that he is being retaliated against faculties(ph), been threatened with termination.

These are chilling allegation. They echo concerns raised by others like John Barnett, who made similar claims about practices at Boeing 787

manufacturing plant in South Carolina, and by Mirra Myers(ph) who came forward last month with additional related claims about a different plant

in Washington.

This new evidence is detailed in a memorandum that I shared with my colleagues, PSI members earlier today. Without objection, I'd like to ask

that this memorandum be entered into the record. Mr. Calhoun, you were brought in to the company as CEO, you had been on the board to turn this

company around.

You and your board of directors have a duty to your shareholders, but they will be deeply ill-served if you fail to correct course, to confront the

root cause of this broken safety culture. You have a duty to demand the highest safety standards and insist that every installation is properly

documented, and ensure that speak up means, in fact, speak up, not shut up, as it is meant all too often.

Boeing needs to stop thinking about the next earning call and start thinking about the next generation. We're here because we want Boeing to

succeed. Boeing needs to succeed for the sake of the jobs it provides, for the sake of local economies it supports.

For the sake of the American traveling public, for the sake of our military. It's not enough for Boeing to shrug its shoulders and say, well,

mistakes happen. This is not an industry where it's OK to cut corners, to reduce inspections, to take shortcuts, and rely on broken parts that

happened to be sitting around.

It's not an industry where it's OK to rush planes out the door because you need to meet a quarterly sales target. I feel you know all of what I am

saying. But it's not enough to say it, Boeing has to do it. Boeing has to live it. In a country where air travel literally was invented with the

ingenuity and exceptional American engineers of Boeing, where still, the best workforce in the world in the aviation industry continues to come to

work every day and do its best.

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There's absolutely no reason where we should not be the home of the preeminent airplane manufacturer in the world. Boeing is making some

leadership changes, but they look more like management musical chairs. Moving the same people to different roles within the company.

People who may have been responsible and should be held accountable. The Department of Justice will conclude its investigation and make its

independent decision about whether to prosecute. But for Boeing, regardless of that decision, it is a moment of reckoning and an opportunity to change

a broken safety culture. With that, I turn to the ranking member.

REP. STEVE COHEN (D-TN): Hey, Mr. Chairman, to avoid repeating much what you said, I'll just ask my -- written opening statement be entered in the

record.

SOARES: You have been listening there to Richard Blumenthal, the U.S. Senate Democrat, really listing some chilling allegations for against

Boeing, talking about the overwhelming evidence, the evidence he said that has been concealed from the FAA, mounting evidence.

And he said that there's so much overwhelming evidence, in fact, from the more than a dozen whistleblowers that have come forward, that the Justice

Department should pursue prosecution against Boeing. He went on to say that Boeing should stop thinking about next earning call and start thinking

about the next generation.

He also said -- which was really interesting that Boeing's problems gone deeper, the one whistleblower, whilst also calling for other whistleblowers

to come forward. But he said that, goes further, goes deeper than one aircraft. He mentioned this, directed of course this to the CEO of Boeing,

Calhoun, who was brought in to turn Boeing around.

And he said that shareholders deeply ill-served if it cannot fix what it says, the moment of reckoning for Boeing. Mary Schiavo has been listening

in with me. And Mary, I mean, it was quite a stinging opening statement there from Senator Blumenthal. What stood out to you?

SCHIAVO: Well, what stood out is that he clearly was sending a message that he has consulted with the Justice Department, that he knows the kind

of evidence that they have with their violation. He didn't go so far as to say that they have decided whether or not they were going to prosecute him,

but it's clear he was laying out for Calhoun and Boeing that he's done his homework.

He knows they have an awful lot wrong, and a lot wrong the public may not even know yet by mentioning these 12 whistleblowers. And let me assure you,

there are many others. Whistleblowers had been coming forward, not just on the 737, but also on the Dreamliner, the 787.

So, there are lots of different lines and it had a number of whistleblowers come forward. The whistleblower mentioned, for example, from South Carolina

was specifically whistle-blowing about the Dreamliner and many things that would if true cause planes to be grounded.

So, it certainly set the tone for the hearing that they have grown weary on. You'll remember these hearings started right after the Ethiopia crash.

So, these hearings of these things, there had been many hearings on the Hill about what has gone wrong with Boeing and how are you going to fix it?

So, the ire is earned --

SOARES: Yes --

SCHIAVO: And it's long overdue for someone to come up with a fix.

SOARES: And what we heard from Richard Blumenthal is not enough anymore to say mistakes happen. We shall continue monitoring, of course, this hearing.

Mary, really appreciate it, I know you'll stay with us throughout. Of course, we will bring of course, the statement from the CEO of Boeing when

that gets underway. Thanks very much, Mary, as always.

I want to turn attention to North Korea, because Russia's Vladimir Putin has now arrived in Pyongyang. That is according to the Kremlin. Western

allies will keep a close watch on his upcoming meeting with leader Kim Jong Un. Russian flags and posters of Mr. Putin have been lining up the streets,

as you can see thereof, Pyongyang, in anticipation of his motorcade.

President Putin hasn't been to North Korea in more than two decades. The North Korean leader was in Russia's far east in September. The Kremlin says

both will sign a new strategic partnership. For North Korea, it is an opportunity to deepen relations with one of its only allies.

For Russia, it's a search for more support in the battle against Ukraine. But for NATO's Secretary-General, Jens Stoltenberg, this alignment is

deeply concerning. Here's what he said in Washington, just a short time ago. Have a listen.

(BEGIN VIDEO CLIP)

JENS STOLTENBERG, SECRETARY-GENERAL, NATO: There's also concern about the potential support that Russia provides to North Korea when it comes to

supporting their missile and nuclear programs.

(END VIDEO CLIP)

[14:20:00]

SOARES: Let's get more now from our chief global affairs correspondent Matthew Chance live in Moscow. And Mathew, I imagine we're not going to see

much of the pomp until probably Wednesday morning. But we are -- we did -- I did hear from the Kremlin. I see that they're expecting an eventful

agenda. What kind of agreements are we looking to get out of this?

MATTHEW CHANCE, CNN CHIEF GLOBAL AFFAIRS CORRESPONDENT: Yes, probably, some significant ones. I mean, it's 3:00 a.m. in the morning in Pyongyang,

and so you're right, we're probably not going to see any of that pomp and ceremony until tomorrow, which is supposed to be the main day of the visit

anyway.

And we know there's going to be a massive parade that's been planned for the center of Pyongyang, and you know, North Korea does these parades on an

enormously large scale, so we'll be watching for that. In terms of the agreements, well, I mean, look, the Kremlin, before Vladimir Putin set out,

said they were going to talk about economics, trade, cultural exchanges, things like that.

But also a strategic partnership treaty which would involve security. Now, the details of it haven't been made clear, but obviously, that's something

that may be a centerpiece of this first visit to Pyongyang by Vladimir Putin for 24 years. It's well-known, Isa, that North Korea has been

supplying Russia with ammunition, particularly artillery shells, the United States and other governments estimate that millions of rounds have already

been sent to the frontlines in Ukraine for Russian forces to sustain their bombardment in that conflict.

Although, of course, the Kremlin and North Korea deny that an arms transaction has taken place. Nevertheless, that's the international

assessment. And so, that will likely -- to be something they discuss as well, more of those kinds of supplies. I think the big sort of --

(CROSSTALK)

SOARES: Matthew, apologies --

CHANCE: Really is what will North Korea get in return?

SOARES: I want to -- apologies to interrupt. Apologies, Matthew, I want to go back to Capitol Hill, we are expecting to hear from the CEO --

(CLEARS THROAT)

SOARES: Excuse me, of Boeing. Let's listen in.

DAVID CALHOUN, CHIEF EXECUTIVE OFFICER, BOEING: Before I begin my opening remarks, I would like to speak directly to those who lost loved ones on

Lion Air Flight 610, on the Ethiopian Airlines Flight 302. I would like to apologize on behalf of all of our Boeing associates spread throughout,

perhaps in present, for your losses.

I apologize for the grief that we have caused. And I want to open (INAUDIBLE), we want to focus on safety for the loss (INAUDIBLE), once

again, I am sorry. You know, every second, a Boeing commercial or defense product takes off and lands somewhere around the world, making us

responsible for the safety of millions of passengers and flight crews every day including our men and women in uniform.

Aerospace safety is built on a robust, industry-wide system that relies on self-disclosure, accountability and continuous learning. This scrutiny to

be held to a very highest standard is fundamental to why commercial aviation is by far the safest mode of transportation today.

I come from this industry, and I know full well that this is an industry where we simply must get it right every single time. I've served as

president and CEO of Boeing since January of 2020 following these tragic accidents. I joined the aviation industry as president and CEO of GE

Aircraft Engines.

My introduction to aerospace safety was after the tragic accident in 1989 of United Airlines flight 232 in Sioux City, Iowa. Due to an uncontained

engine failure that led to sweeping changes on our industry's safety management processes and contributed significantly to flight safety going

forward.

And from this experience, I understand that gravity of Boeing's role in upholding the integrity of aerospace safety in our industry. We deeply

regret the impact that the Alaska Airlines Flight 1282 accident had on Alaska Airlines team and its passengers. And we are grateful to the pilots

and crew for safely landing the plane.

We are thankful that there were no fatalities. From the beginning, we took responsibility and cooperated transparently with the NTSB and the FAA in

their respective investigations. And our factories and our supply chain, we took immediate action to ensure the specific circumstances that led to this

accident, could never happen again.

[14:25:00]

Importantly, we went beyond to look comprehensively at our quality and manufacturing systems, and we slowed things down dramatically. To launch

this more comprehensive look, we've held stand downs in our plants, and we've listened to our employees and acted on their ideas.

We've brought in an independent quality experts to assess our processes, and we have announced our intention to reacquire Spirit AeroSystems, the

manufacturer of our fuselage. In consideration of these inputs, Boeing developed a comprehensive safety and quality action plan with very specific

metrics, which we will use to hold ourselves accountable and the FAA will use to provide the oversight required.

Most importantly, it is our people. Over 170,000 around the world who are our greatest strength. We've asked every one of our employees to consider

themselves an aviation safety advocate. We're committed to making sure every employee feels empowered to speak up if they see a problem.

We also have strict policies that prohibit retaliation against employees who come forward. It is our job to listen regardless of how we obtain

feedback and handle it with the seriousness it deserves. Much has been said about Boeing's culture. We've heard those concerns loud and clear.

Our culture is far from perfect, but we are taking action and we are making progress. We understand the gravity, and we're committed to moving forward

with transparency and accountability, while elevating employee engagement every step of the way.

Our airplanes have carried the equivalent of more than double the population of the planet. Getting this right is critical for our company.

It's critical for our customers who fly our planes every day, and it's critical for our country. We're part of a global ecosystem composed of

manufacturers, suppliers, airlines, airports, air traffic controllers and regulators.

And they're all committed to learning from every incident. It is this relentless focus on improvement that has led to our industry's unparalleled

safety record. It is with this mindset we're taking comprehensive action to strengthen safety and quality. And we know as America's premier aerospace

manufacturer, this is what you and the flying public have every right to expect from us. And thank you Mr. Chairman and Howard(ph) and I will be

happy to take your questions.

BLUMENTHAL: Thank you, Mr. Calhoun. We will have seven-minute rounds. I'll begin. Mr. Calhoun, more than five years after the Max crashes, you're once

again making promises and seeming commitments, they seem highly aspirational, they are very general to correct course.

Do you think Boeing has done enough today to make those kinds of corrections, and what would you say to the whistleblowers who have come

forward and faced retaliation?

CALHOUN: Senator, thank you for the question. I ask myself that question every day. Have we done enough? I will remind everyone the findings and the

accidents, and we all participated in the investigative work, we saw the conclusions by virtue of the NTSB reports and the local regulators reports.

These issues were attributed to the development of the airplane and a software package referred to as MCAS. And then we took responsibility for

that error.

BLUMENTHAL: You accept that Boeing was responsible for those crashes in 346 --

CALHOUN: I accept it, MCAS and Boeing are responsible for those crashes, yes sir --

BLUMENTHAL: But has enough been done to-date already?

CALHOUN: So, this is the answer to that question. The development process for an airplane starts with an engineering effort. So, we have revamped our

engineering effort at large. We have created a series of design practices including a new one referred to as human factors.

It speaks directly to the work that needed to be done to prevent MCAS from creating the environment that face -- that those pilots face at that

moment. So, we did that, we established a safety management system. We learned from the FAA and from our airline customers what it was and how to

implement it.

We've been listening to it. We tune that safety management system into every airplane that flies every second of every day, so that we can learn -

-

BLUMENTHAL: Well, let me be more --

CALHOUN: From those airplanes.

BLUMENTHAL: Let me be more specific and I apologize --

CALHOUN: Please --

BLUMENTHAL: For interrupting, but we are limited in terms of time.

[14:30:00]

Boeing has a code of conduct that states, and I quote, "I will never retaliate against or punish anyone who speaks up to report a concern." And

yet, the whistleblowers that we have heard, including testifying before this Committee, have reported a host of retaliatory behaviors from

reassignment to exclusion from key meeting, to being sidelined and sidetracked in their careers, verbal harassment and threats, and even

physical violence.

After whistleblower John Barnett raised his concerns about missing parts. He reported that his supervisor called him 19 times in one day and 21 times

another day. And when Barnett asked his supervisor about those calls, he was told, "I'm going to push you until you break." He broke. When

whistleblower Sam Mohawk raised concerns about Boeing's concealment of non- conforming parts, he was put in charge of completing corrective action investigation with an impossible deadline and then threatened with formal

discipline, including firing if he couldn't meet that deadline.

When I hear about these experiences, I wonder whether Boeing really wants change. How can you reassure us that Boeing is going to, in fact, end this

broken safety culture?

DAVID CALHOUN, CEO, BOEING: Senator, I'm going to start by assuring you that I listened to the whistleblowers that appeared at your hearing.

Something went wrong. And I know the sincerity of their remarks.

BLUMENTHAL: Well, let me ask you a more specific --

CALHOUN: And then, with respect to our company, we do have a policy. I often, often cite and reward the people who bring issues forward, even if

they have huge consequence on our company and our production levels, et cetera. My leadership team does that.

We survey our people with respect to do they feel empowered to speak up. That survey performance gets better and better. It's never perfect. We work

hard to reach out to our people.

Immediately following Alaska, we had a stand down. The stand downs continue and they rotate and we listen to everybody. I'm trying to deal with 30,000

ideas on how we can move forward. How do we make their jobs easier? How do we train them more effectively? How do we that -- our team is -- we are

working hard --

BLUMENTHAL: Let me ask you -- Mr. Calhoun, let me ask you, how many of your employees have been fired for retaliating against whistleblowers?

CALHOUN: Senator, I don't have that number on the tip of my tongue, but I know it happens. I know it happens.

BLUMENTHAL: Have any been firing --

CALHOUN: I am happy to follow up and get you that number.

BLUMENTHAL: I would appreciate your following up. Let me ask you, have any of your supervisors, your managers, anybody been fired for retaliating

against people who speak truth to power about defects or problems in production?

CALHOUN: Senator, we have fired people and disciplined people. And I am happy to follow up with what you need --

BLUMENTHAL: Who have you fired and how have they been disciplined?

CALHOUN: -- without -- I'm not -- I can't -- I have concern on privacy. And as you know, every one of those cases --

BLUMENTHAL: But will you come back to this Committee and tell us?

CALHOUN: I will most certainly get back to you, sir.

BLUMENTHAL: Let me ask you, have you been aware of how Boeing has complied with requests for information from this Committee?

CALHOUN: Probably not by line item. No, sir.

BLUMENTHAL: Well, let me show you a sample of the data produced by Boeing in response to requests by this Committee. I'll show you a bigger display

and the details have been provided to you. Are you able to make sense of this?

CALHOUN: No, sir.

BLUMENTHAL: Complete gobbledygook.

CALHOUN: Yes, sir.

BLUMENTHAL: This is what Boeing has provided to this Committee in response to our request for information. Can you justify these productions?

CALHOUN: I will -- I would describe it precisely as you did, and I can't justify. And I am -- I will most definitely follow up.

[14:35:00]

BLUMENTHAL: My time has expired on this first round. And we're going to try to stick to the time limits. Because we have a number of colleagues

here, and I want everybody to have a first round. We will have a second round for our colleagues who want to do it. I turn to now to the ranking

member.

SEN. RON JOHNSON (R-WI): Thank you, Mr. Chairman. Pick up where the chairman just left off. You said you'll check into that. Did you talk to

the individual responsible for complying with our information request or have you had a meeting with that individual or that group of individuals?

CALHOUN: Senator Johnson, I my team knows and I have talked to them about the need for transparency at every level and every stage. So, beyond that,

as a backdrop, no, I did not review each line item.

JOHNSON: So, who would be your direct report responsible for providing this Committee the information -- the subcommittee the information

requested?

CALHOUN: Yes. I mean, accommodation of my council and my government affairs office.

JOHNSON: OK. So, you'll talk to them today about this?

CALHOUN: Yes. Well, they're right behind me. And so, I'm sure -- yes, it's registered.

JOHNSON: You said you've listened to the whistleblowers. Have you directly spoken to any of the whistleblowers?

CALHOUN: I have not directly spoken to any of the whistleblowers.

JOHNSON: Do you think that'd be a good idea to do that?

CALHOUN: Yes, I think it would. ' JOHNSON: I'd recommend it.

CALHOUN: Yes.

JOHNSON: Exactly what are you doing then to investigate the whistleblower complaints? If you haven't spoken to him directly --

CALHOUN: Yes, sir.

JOHNSON: -- I mean, again, have you just turned over to your council or --

CALHOUN: No, we have a team. We have an ethics hotline and a team of investigators. The most important thing in every whistleblower out of the

chute is to make sure we understand the substantive issue that is being discussed and do safety analysis immediately. And go out and interview

everybody that's involved and/or has touched any of that work and assure ourself that we have safe airplanes.

And if there are corrective actions to take with respect to the points that they make with us, that's what we do, and we try to get on that

immediately. But there's always an objective view and a number of perspectives, particularly with respect to engineering disciplines that

have to come to bear on it.

JOHNSON: So, how many employees does Boeing have?

CALHOUN: 170,000.

JOHNSON: So, having run a much smaller operation. I mean, first thing I can say is I realize that I don't control what everybody does. You try and

set policies, you can communicate as clearly as possible, people are people.

The question I have for you, because it's actually quite shocking to have a supervisor calling somebody up 19 times in one day, you know, and making

the statement I'm going to break you. My guess is you don't condone that kind of behavior. Have you looked at your incentives system within Boeing?

And let's face it, there's obviously pressure on your sales -- you know, from your sales force to your manufacturing operation to deliver the planes

that they've sold to airlines.

Again, there's pressure throughout companies, you know. And I can just imagine that the pressure is being applied to Boeing associates throughout

the company. OK. I get that. I've been in manufacturing. But have you reviewed, for example, your incentive systems that maybe would drive that

kind of behavior, you know, having to meet quotas or, I mean, have you reviewed that?

CALHOUN: Yes. This year, we made a number of significant changes to our incentive structure that really emphasizes all things safety, including the

running adjust culture. With that respect, an adjust culture, I think, is the environment that you would like us to run. And so, yes, that incentive

alignment is now in place.

JOHNSON: So, prior to our last hearing, one of the articles I read, whether fair or unfair, talked about in your disclosures -- it's probably

the SEC, where you were scoring high on ESG and DEI. And your score was zero on your quality. These are internal quality performance measures. Can

you speak to that report?

CALHOUN: That's a fact.

JOHNSON: Because the point being is, is Boeing's management, are they concentrating on DEI and ESG, and at the expense of really meeting your

quality performance measures?

CALHOUN: Senator, I've never seen those two things ever come into conflict. I don't believe my team has ever allowed for them to come into

conflict in any way.

JOHNSON: It's not -- not necessarily conflict, it's what you're emphasizing. What -- where are you putting your management emphasis?

CALHOUN: Yes. Well, again, Senator, there's a comp system. There's also what we work on every day all day knowing how important and critical it is

for the future of our company.

[14:40:00]

Safety and quality is it -- it's been that way since January of 2020 because of what we have been responding to. Safety and quality, that is

what we talk about.

JOHNSON: You know, I'll mention another article. And the reason I'm doing this is one of the reasons we have a -- we need a free press, it would be

nice to have a completely unbiased free press, but we need investigative reporting. We only have so much staff here at a subcommittee level or even

a committee level. So, we really do need journalists going out there and digging up stories.

But one of the ones I thought interesting before this hearing, I spoke to the very real problem, the difficulty you are having in finding -- well,

first of all, your workforce -- manufacturing workforce is aging. You know, throwing COVID on there, early retirement, that type of thing, you lost a

lot of experience.

And in the past, it sounds like Boeing was able to tap into a workforce that was -- had experience in the aerospace industry, and you don't have

that luxury anymore. I'm not exactly sure when that changed. I know coming from manufacturing myself, it's been difficult to hire people in a

manufacturing operation because, let's face it, we tell our kids, you got get a four-year degree and you want to be in management.

So, we don't encourage people to go into manufacturing, but can you speak to that issue or maybe Mr. MacKenzie can speak to that issue in terms of

just your challenges in hiring people in a manufacturing setting for a very high quality, high demand aerospace industry.

CALHOUN: Senator Johnson, and I appreciate the question more than you know. The post-COVID moment in the aerospace industry has been unbelievably

difficult to navigate. We have 10,000 suppliers. We put almost two and a half million parts into a 787. Boeing, because it's big and it has

resources, even those were strained. We were able to keep more than most. But like you say, we turned over a lot of people. And yes, a lot of

experienced people. Our supply chain experienced enormous turnover.

So, as we try to respond to unbelievable demand for airplanes out there, we have a supply constraint that is very real and it is not resolved today.

And I think one of the most important things we can do, we've done it in a few large instances, but now, we have to train ourselves to do it at small

instances, meaning every employee. If a part's not there on time, if a part's non-conforming, we will stop the line.

This -- so much of this relates to an untrained workforce. I'm going to tell you, it's all about that, honestly.

JOHNSON: Thank you. Thank you, Mr. Calhoun.

BLUMENTHAL: Senator Hassan.

SEN. MAGGIE HASSAN (D-NH): Thank you, Mr. Chair and Ranking Member Johnson for holding this hearing to the families and loved ones of the people we

have lost to Boeing safety failures. Our condolences, and thank you for continuing to advocate for your loved ones and for airline safety generally

and for the safety of the public.

Mr. Calhoun, it seems like every other day news breaks have a new problem or safety concern with Boeing aircraft. In just the last week, there has

been one new --

ISA SOARES, CNN INTERNATIONAL HOST: You've been looking there at U.S. Senate hearing where David Calhoun, the CEO of Boeing, has been facing

questions. We started with Richard Blumenthal, the U.S. Senate Democrat that talked of evidence that's been concealed from the FAA, mounting

evidence, overwhelming evidence, he said. And he said that Boeing's problems go deep in the one whistleblower.

He then listed chilling allegations from a dozen or so whistleblowers that have come forward, and he said that the Justice Department -- he believes

that the Justice Department -- there's enough evidence to suggest that the Justice Department should pursue prosecution against Boeing.

We've now been hearing, of course, from David Calhoun, the CEO of Boeing, who, at the beginning of his speech, got up, turned around to face the

members of family of those who have died, 157 crash victims of Boeing 737 MAX 8 in Ethiopia and apologized. He then went on to say that this is an

industry where we must get it right every time. He said, we have beginning -- we've started slowing things down. We have listened to our employers,

but then went on to say he has not spoken directly to any whistleblowers. And now, he's being peppered with questions about what is being done to

correct course at Boeing.

Let's get more now from CNN Aviation and Transportation Analyst Mary Schiavo. She's live from Charleston, South Carolina. So, Mary, what have

you -- I mean, what stood out to you from what we've heard from David Calhoun there just now?

[14:45:00]

MARY SCHIAVO, CNN AVIATION AND TRANSPORTATION ANALYST: Well, what has really been shocking to me is he is not prepared for this grilling. And as

somebody who -- you know, personally, I've testified before the Senate and the House of Representatives many times, and what you don't do is go into a

hearing and attempt to think it's going to be, you know, a snow job, or you can soft pedal it.

For example, he said, well, we took responsibility for Alaska Airlines door plug blowout. But then he kind of sloughed over the fact and he said he

took -- they took responsibility for the crash of Lion Air and the crash of Ethiopia Airlines. Well, yes, technically, but many years later, they

fought responsibility for about, oh, three years.

At first, they said Lion Air was the pilot's fault and then they tried to do that in Ethiopia. And so, about three years later, yes, they admitted

responsibility. There's going to be blowback on that one.

To not be familiar with the documents that were produced to the Senate when Senator Blumenthal held them up, and he said, this is gobbledygook, and are

you familiar with them? And he wasn't. Whoever prepared him for this -- and he should have been responsible for his own preparation, just didn't do it

when he wasn't really familiar with the report that they scored a zero on quality control and said, oh, we don't really have a conflict in that.

And then finally, I mean, if you're going before Congress and you know, they've got 12 whistleblowers, they talk to, you know, you ought to get out

of the corporate suite and walk down and talk to them. Use a little wham, walk around management.

I -- you know, Mr. Calhoun says he's going to retire by the end of the year. Given this performance so far, I don't think he's going to make it

until the end of the year. He is just not answering the questions. These senators, they're not going to like it.

SOARES: And this is just the beginning. Mary, do you stay with us? I want to bring in Richard Quest live from New York with us. And, Richard, we have

heard several senators already -- do we have Richard? Yes, we do. Several senators asking the CEO of Boeing, you know, how can you reassure us what

is being done to correct course here, to make sure that this broken company culture is being fixed? What did you make of his response so far, Richard,

on that?

RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: It was weak. But as Senator Blumenthal made quite clear, look, you told us you were going to change

culture and do all these things after the two crashes that Mary is talking about. And you had several years, and then Alaska happened. So, in essence,

Isa, what all the questions are boiling down to is, why should we believe you now?

The whistleblower stuff is all, to a certain extent, you know, how you treated your whistleblowers. It's not on the main issue. The main issue is,

how did you -- how are you changing the culture, which Calhoun admits is not perfect, but he hasn't told us how he's going to do it? He just

continually says, he's going to focus down, laser like, this, that, and the other. Well, it all begs the question, but you promised us that before.

And the truth of the matter is, Isa, he doesn't have an answer to it, because he can't prove it, because it's only a rear-view mirror proof that

you'll take. It's only afterwards. What he said is, we're putting in place all these pieces, the independent auditor, the safety inspector, more

people on the line. But it is only in hindsight, later, we'll be able to tell if that was sufficient.

SOARES: Richard Quest, we will, of course, keep an eye on what we're hearing on Capitol Hill from -- and, of course, as soon as there are any

more developments, we will bring them to you. Mary Schiavo, Richard Quest. Appreciate it. And Richard Quest will have much more on his show in about

an hour and a bit's time. Thank you to you both.

We are going to take a short break. We'll be back after this.

(COMMERCIAL BREAK)

[14:50:00]

SOARES: Welcome back everyone. I want to show you images coming out of North Korea. And we are getting our first pictures of leader Kim Jong Un,

as you can see there, welcoming Russia President Vladimir Putin in Pyongyang. This is, of course, the Russian leader's first visit to North

Korea in more than 20 years.

As you can see their North Korean leader Kim Jong Un personally greeting President Putin at the plane ramp there as he arrived in Pyongyang. We know

that the two leaders -- very amicable greet there between both leaders. We know the two leaders can see their pause talking before then minutes later

making their way to their motorcades.

But this -- you know, this is a two-day visit that starts today. It is Russian president's first trip to the country in more than two decades. And

it's going to be a trip, they'll be closely watch no doubt, because they will be trying to cement a burgeoning partnership between these two powers.

Now, it is critically important, we were talking about this earlier with Matthew Chance who was telling us about what both sides are trying to get

out of this trip. You can see there President Putin greeting leaders there, representatives from Pyongyang.

But it is -- we're seeing a sign of deepening alignment. An important point, of course, for President Putin since Russia's full-scale invasion of

Ukraine, who is, of course, been supplying weaponry, ammunition for the war to support President Putin.

I want to bring in Kevin Liptak. It is Kevin Liptak, isn't it? Oh, OK. So, we will -- apologies, Kevin. If you want to talk about what's happening in

North Korea feel free to jump in. But look, it is a moment where, no doubt, world leaders will be watching. We heard, of course, what -- from the

United States, U.S. lawmakers saying, you know, the concern of this rapprochement between these two countries.

But leaving that aside for just one moment, we are expecting, what, in the next 15 minutes or so, to hear from former U.S. President Joe -- from U.S.

President Joe Biden. Talk to us about this announcement on immigration that could potentially protect around half a million immigrants from

deportation. What are we expecting? What is the thinking here?

KEVIN LIPTAK: Yes. And I will just say on that visit to North Korea, it is all part of this nexus, the China, Russia, North Korea nexus that the

people at the White House have been watching so closely, particularly as it relates to the war in Ukraine and the great fears that that could just

prolong that conflict even further. And so, you're right, they are watching that very closely.

But for now, what President Biden is doing is making this major announcement on immigration from the White House. His plan is to protect

around 500,000 undocumented people who are living in the United States and are married to American citizens. He's going to shield them from

deportation.

It's a major sweeping step, and it's all part of this very fraught political issue for President Biden. It's one of the issues that he's most

vulnerable on when it comes to the election in November. And you can kind of view it as a counterpoint to this announcement that he made a few weeks

ago that essentially shut down the U.S. southern border to asylum seekers that had caused so much angst and anxiety among progressives and among

immigration advocates who were worried that he was just being too harsh and in fact relying on some of the same tools that Former President Trump was

relying on when it came to securing the southern border.

[14:55:00]

The step that he's doing today is an attempt to counterbalance that in some way, an attempt to counterbalance that in some way, an attempt to keep some

families together. It is the most sweeping action in terms of deportation relief that any president has taken since Former President Obama in the

June of his own re-election year in 2020 -- or 2012 rather, protected some young undocumented immigrants from deportation, the so-called Dreamers.

And so, what Biden is doing today is marking the 12th anniversary of the Dreamers announcement and making his own announcement, taking it a step

further, protecting these folks from deportation. And when you look at the states where some of these people live, at states like Arizona. Nevada,

Georgia, these critical battlegrounds where this election will be won.

And so, I think you can view this certainly through a political lens as President Biden tries to shore up support on his progressive flank, but

also tries to show that he is taking this issue seriously, this issue of immigration, which has been so critical in this election.

SOARES: Potentially making a serious play, of course, for Latino voters, as you said, in those key battleground states. Thank you very much, Kevin.

As ever, the professional. Appreciate it.

And that does it for us for tonight. Thanks very much for your company. Do stay right here. "Newsroom with Omar Jimenez" is up next. I shall see you

tomorrow. Bye-bye.

(COMMERCIAL BREAK)

[15:00:00]

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