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Regulator faults aerospace giant after surveyed employees reported interference and transparency issues on safety matters

The Federal Aviation Administration is launching a broad review of how Boeing Co. BA 3.16% employees handle safety matters on the agency’s behalf after some company engineers said they face undue pressure, according to an agency letter and people familiar with the matter.

An FAA survey conducted this year found 35% of a small sample of certain Boeing employees reported problems including pressure and hurdles to transparency, according to an Aug. 19 agency letter to Boeing. Some surveyed employees, who are part of a group empowered by the agency to assist its work, said they encountered difficulties in being transparent with regulators, according to the letter, which was viewed by The Wall Street Journal.

U.S. aviation regulators have long relied on aerospace-company employees to act on their behalf for performing certain tasks, such as signing off on certain safety assessments or approving aircraft for delivery. The problems cited by Boeing employees in the survey “indicate the environment does not support independence” of those who are empowered to act on the agency’s behalf, according to the letter, which was signed by Ian Won, acting manager of the FAA’s Boeing oversight office in the Seattle area.

A Boeing spokeswoman said the company takes “these matters with the utmost seriousness” and is working to bolster the independence of its employees who work on the FAA’s behalf.

“We have consistently reinforced with our team that delegated authority is a privilege and that we must work every day to be trusted with the responsibility,” she said. Boeing has directed that its FAA delegates “must be accorded the same respect and deference that is shown to our regulator.”

The Chicago-based aerospace giant has faced setbacks in recent years related to engineering and quality issues with various commercial, military and space programs.

Problems cited by the August letter are similar to some identified by a 2016 internal Boeing survey, which was highlighted by a Congressional investigation into two fatal crashes of the plane maker’s 737 MAX jets in late 2018 and early 2019. The crashes, which took 346 lives, led Boeing to revamp how it handles engineering matters and prompted U.S. lawmakers to require changes to how regulators certify aircraft are safe.

The recent FAA survey was conducted between May and July this year, according to the letter. It involved 32 employees out of approximately 1,400 Boeing staff who work on the FAA’s behalf, according to people familiar with the matter. The letter said the “concerns require an objective review and further fact finding,” potentially including an anonymous, independent survey of all members of what is formally known as Boeing’s Organization Designation Authorization unit. The Boeing spokeswoman said the company was working with the FAA to follow its guidance.

The two-page letter came with excerpts from interviews with Boeing employees. The employees, who were quoted anonymously, told the FAA that the pressure they felt wasn’t necessarily overt and could also come from the engineering ranks pushing to stay on schedule.

“I feel undue pressure but I stand up to it,” one Boeing employee was quoted by the letter as saying.

The FAA letter said that “Boeing’s company culture appears to hamper” its FAA-empowered employees “from communicating openly with the FAA.” The letter cited one Boeing employee who told the agency: “I am very aware that my bringing up issues is not appreciated.”

The increased scrutiny comes as the FAA prepares to study the company’s culture, as required by a new federal law requiring changes to how the U.S. certifies airplanes for commercial service. Those changes came in the wake of the MAX crashes, and after U.S. lawmakers criticized the FAA and its oversight of Boeing throughout the aircraft’s development.

Before the legislation became law, an investigation by the U.S. House Transportation Committee released the 2016 internal Boeing survey that showed roughly one in three employees who responded felt “potential undue pressure” from managers across various commercial planes.

The Boeing spokeswoman said the company has worked hard to “build a culture of open communication, trust, transparency and respect.”

Funding for next-generation air mobility soars 83% over five years but market exuberance may be waning

Investors have poured an annual record $4.3bn into electric air taxi start-ups this year, as many hope to uncover “the next Tesla”.

Funding hit the level in the first eight months of 2021 from venture capital and public markets through planned mergers with special purpose acquisition companies, or Spacs, according to figures from McKinsey.

Spacs list on stock markets and then go hunting for a target company with which to merge.

The money has rushed into the nascent market as funding for all types of future air mobility solutions, including drones, has soared 83 per cent to more than $10.4bn in the past five years, the consultancy said. The figures excluded non-public funding by strategic players. 

It is one of the hottest markets, despite most start-ups not yet having a flying prototype able to carry passengers. The excitement around the fledgling sector has drawn comparisons to the enthusiasm surrounding electric car companies.

Peter Harrop, chair of technology consultancy IDTechEx, said parts of the air taxi industry have a promising future but warned that billions of dollars have been invested by people who “want the easy money of finding the next Tesla”. 

“We are in a white-heat situation where you can float almost anything for billions. We have companies that don’t yet have a product selling the dream and raising billions,” he said.

But there are signs that some of this exuberance could be on the wane just as several high-profile air taxi start-ups, such as Lilium, Archer and Vertical Aerospace, prepare to go public this year. 

Joby Aviation, which listed on the New York Stock Exchange through a Spac this month and counts Toyota among its backers, raised less than expected on the day.

However, Joby said proceeds from its market debut alongside cash on its balance sheet were enough to fund the company through initial commercial operations.

Fellow start-up Archer recently cut its valuation by $1bn in a revised deal with Atlas Crest, the Spac with which it is preparing to merge. The groups said the change would establish a more attractive entry point for investors. 

Robin Riedel, partner at McKinsey who leads the consultancy’s future of air mobility group, said: “The enthusiasm we have seen in the first quarter of the year has quietened down a bit.

“It’s [due to] a combination of things: overall the markets have [become] less excited about Spac deals; the range of players has broadened; and people are accepting there might be delays in terms of things like certification.”

Michael Cervenka, president of Vertical Aerospace, which in June unveiled preliminary commitments from Virgin Atlantic, American Airlines and leasing company Avalon to buy up to 1,000 air taxis, told the Financial Times: “This is a new space and with some frothiness coming out, you would expect redemptions.”

Martin Warner, founder of start-up Autonomous Flight, one of the smaller players, said it was “inevitable that once the hype goes people will trade out and it corrects. I don’t think there is anything wrong with that.”

“You are getting a correction but I am still optimistic this industry is something really different.”

Vertical Aerospace’s Cervenka said there was “real value” in “companies like ours going public”.

“Given we are changing aviation and transportation” visibility, transparency and public trust were important, he said, and “part of that [trust] comes from being a public company”.

Funding deals were still coming through for companies, added McKinsey’s Riedel.

The biggest challenge for the industry remained certification by aviation safety regulators. Maria Algar Ruiz, drones programme manager at the EU Aviation Safety Agency, said the regulator expected the “first commercial piloted air taxi operations will be in place in 2024-25”.

In the UK, Heathrow and London City airport are working with Brazilian aircraft manufacturer Embraer and regulators to explore how to redesign regional airspace to safely accommodate low-flying air taxis. London City believed it could be possible to introduce an air taxi network by the middle of this decade.

The technology might enter service sooner in other countries: Singapore has pledged to run the world’s first commercial electric air taxi service by the end of 2023 in partnership with German start-up Volocopter.

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S&P +0.20% Nasdaq +0.21% EuroStoxx +0.21% FTSE +0.18% Dax +0.08% SMI- 0.17%

Macro :

- Super funds could short heavy emitters to meet net zero targets, US hedge fund titan warns

Spacs :

- Volta-Linked SPAC Tortoise II Sinks Ahead of Expected Deal Vote

- Investors pump a record $4.3bn into air taxi start-ups

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* Bank of Georgia Group Raised to Buy at Peel Hunt; PT 1,967 pence

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Brussels’ opposition to Britain’s attempt to join Lugano Convention could add uncertainty to family break-ups

A European Commission plan to block the UK from joining an international legal co-operation agreement after Brexit will inflict serious complications on divorce settlements and child maintenance awards, lawyers have warned.

Brussels said last month the UK should not be allowed to join the 2007 Lugano Convention, an agreement that determines which countries’ courts have jurisdiction over cross-border civil and commercial disputes, and ensures that the resulting judgments can be enforced abroad.

The recommendation by the commission to prevent UK accession after Brexit was seen as an attempt to erode London’s position as a global centre for commercial dispute resolution, but lawyers said it would now bring painful and costly legal uncertainty to family break-ups.

Rachael Kelsey, president of the European chapter of the International Academy of Family Lawyers, urged the commission to reconsider its position for the sake of millions of EU and UK citizens with family relationships that straddle the English Channel.

“A year ago, we could say with total confidence and clarity ‘This court has jurisdiction, this is how long a case will take, and this is the cost ballpark’ — but now that is no longer the case,” she said.

“We need to put politics aside and recognise that there are millions of EU and UK citizens who are going to be prejudiced if we don’t end up with a better set of harmonised rules,” said Kelsey.

The UK government application to join the Lugano Convention — Britain was a party to the accord as an EU member state — was backed by the three convention signatories outside the bloc.

But the commission said the request should be rebuffed since the UK had requested a distant relationship with the EU based on a basic free trade agreement.

A final decision on UK accession will be taken by EU member states in the European Council, but officials on both sides said expectations of any movement on the issue were very low, given tensions between London and Brussels over post-Brexit relations.

Josep Gálvez, a former Spanish judge and commercial arbitration expert now at London-based Del Canto Chambers, said the commission’s advice to block UK membership appeared to be designed to weaken the attraction of the British capital as a centre for dispute resolution.

“It is a way to punish the UK for leaving the EU, but also a very good opportunity for some EU jurisdictions to attract international litigation to their courts,” he added.

Without membership of the Lugano Convention, lawyers managing EU family cases on either side of the Channel will have to rely on The Hague Conventions.

Legal experts said these were less comprehensive and did not prevent parallel court cases in competing jurisdictions.

The Hague Conventions also do not allow orders, such as child maintenance payments, made in one jurisdiction to be enforced in another as easily.

Kelsey said a research paper by the International Academy of Family Lawyers that sought the opinion of expert lawyers found they unanimously agreed it was better for EU and UK citizens for Britain to be allowed to join the Lugano Convention.

William Healing, a partner at London family law firm Alexiou Fisher Philipps who has worked with the French community in England for more than two decades, said there would be “no winners on either side” if the UK was kept out of the convention. 

The EU should allow the UK to join the convention immediately, he added. “It will help separated families recover maintenance, and in commercial law will make judgments readily enforceable,” he said.

Downing Street said that allowing UK accession to the Lugano Convention was a “sensible and pragmatic” solution for EU and UK citizens and would ensure that cross-border legal disputes for consumers and families can be resolved smoothly. 

“We maintain that we meet the criteria for accession both because it is open to countries outside the EU, and all non-EU members already supported the UK’s membership,” it added.

You can now wear what you want to work

The pandemic has changed not only how we do our jobs but the clothing we do them in. What price will we pay for this sartorial freedom?

The conservative journalist William F Buckley Jr wrote that the magazine he founded, the National Review, “stands athwart history, yelling Stop, at a time when no one is inclined to do so”. As a style writer, I’ve spent a lot of time doing the same. Not to say that I approve of men wearing retro or old-timey clothes. “Gent” gear is the worst. What I ramble on about is just the idea that dressing up is good, caring about clothes is good, a little formality in presentation is good. Most men disagree, and are keen to tell you so.

I think men never look better than they do in a good suit and polished shoes. I think the idea that any formality in dress makes for discomfort is a fantasy constructed by slobs who are intimidated by nice clothes. I think a little care in dress shows not snobbery but humbleness and concern for others. I think many straight men’s feigned indifference to clothes is an expression of tiresome sexual insecurity in a world where gender is up for grabs. I think neckties are lovely. I have rattled on about this sort of thing for years.

Well, news flash: the train of history is not stopping, not for William F Buckley Jr, and not for me.

Indeed, the pandemic has caused it to accelerate. The idea that there are certain contexts, work contexts in particular, in which you have to wear one thing and not another is bankrupt. Whenever you go back to work, you will be free to wear any damn thing you want, within the bounds of hygiene and basic decency. Shorts? Only a matter of time, I bet, and the only reason we are not there yet is because most offices are freezing. T-shirt to a meeting? Of course. We’ve been wearing T-shirts to meetings for months, over Zoom. And it was fine.

All the articles written in the past year or two about how, say, Wall Street has gone casual — some of which I wrote, in a mildly humiliating but wildly successful search for clicks — have the same totally accurate comment beneath them. It is that Wall Street already is casual, has been for years, because no one cares, really. The pandemic just formalised the informality.

Why did Covid drive the final nail into the coffin? By way of analogy, think about the agonised debates about how much we will work from home when the pandemic is really and truly over. But the answer, obviously, is that in any job where people have been productive over the past year and a half, we will work mostly from home now. Because people are lazy and companies are greedy. I am massively more productive than I was before the pandemic, because my commute-free day has two more hours in it than it did before, and I spend most of these new hours working. Is my boss going to call up and say, we want you in here, so you can produce less copy? Water cooler conversations, my ass.

Similarly, we have worked in our underwear for months, grudgingly pulling on a T-shirt for video calls, and we all survived. (I unthinkingly answered one work Zoom shirtless, and stayed employed, though my colleague did almost die laughing.) People will not change course and go back to thinking “being presentable” is a requirement.

Francis Fukuyama declared in 1989 that liberal democracy had won and history was over. What we have had since then is three decades of conflict with authoritarians abroad and illiberal nut-jobs at home. I think the lesson was not that Fukuyama was wrong, but that the end of history is painful.

Similarly with the end of office clothes. It will not be the relaxed utopia clothes-haters expect. It used to be that you wore what you did, more or less, because you had to.

Now everything you wear will be your choice, with the result that people read more into each others’ professional work clothes than they did before. Work clothes will come to matter more, not less. There is a reason that kids are happier in schools that require uniforms (though they may deny it) — it’s one less thing to worry about. Freedom will turn out to be a lot of work.

Lawsuit seeks damages from chemical company Savaro which claimants argue owned the ammonium nitrate that exploded

Lebanese lawyers have sued a UK-registered chemical company at the High Court in London over its alleged role in the massive explosion last year at Beirut’s port that killed more than 200 people. 

The lawsuit was filed against Savaro Ltd this month by the Beirut Bar Association and four others, including a survivor of the blast and the families of two people who were killed. It alleges the chemical company failed to properly store or dispose of hundreds of tonnes of ammonium nitrate that exploded on August 4 last year, causing one of the largest non-nuclear blasts in history.

Lawyers said the case was an attempt to hold to account those allegedly responsible for the explosion, which devastated huge areas of Beirut, killed at least 218 people, wounded thousands of others and caused about $4bn of damage to the Lebanese capital.

Families of the victims have increasingly pinned their hopes on international investigations to bring them justice, as they blame Lebanon’s ruling elite for hampering a domestic probe.

This case is being brought in London because Savaro, listed as a chemical wholesale, is registered in the UK. The lawyers are seeking damages from the company, although these will be quantified later.

The legal challenge argues that Savaro owned the 2,750 tonnes of ammonium nitrate, which was in 2013 destined for an explosives company in Mozambique. The ageing ship transporting the cargo foundered in Beirut’s port en route to southern Africa and the chemical material, which is used in explosives, was offloaded in 2014 to a port warehouse on the instructions of a Lebanese court.

Richard Slade, a lawyer at the eponymous legal firm that is representing Savaro, said the chemicals company “has never traded” and did not enter into the transactions referred to in the claim.

Slade said the company would make its defence “in due course”. A new Savaro director was appointed on Friday — Ukrainian lawyer Volodymyr Hliadchenko, who said he had “acquired the company’s corporate ownership”.

The lawsuit is led by Camille Abousleiman, a former Lebanese labour minister, and law firm Dechert, where he is a partner. 

Abousleiman told the Financial Times he believed Savaro was the owner of the ammonium nitrate, and as such Savaro was responsible under Lebanese law for its proper storage, disposal and any damage caused by it.

“The victims and the surviving family members of the victims believe that anybody who has direct or indirect responsibility for this blast should be brought to justice, both criminal and civil, wherever there is jurisdiction,” Abousleiman said. “I don’t think anybody should escape justice in this particular horrendous situation.” 

An FT investigation last year found Savaro had made inquiries about the shipment in 2015, but the FT was not able to confirm whether the company took further action after learning from a Lebanese court-issued report that more than half of the bags holding the ammonium nitrate were damaged. 

Since its incorporation in 2006, Savaro has often filed accounts as a “dormant” firm.

“We are highly confident that we’re going to have evidence of who the beneficial owner is,” Abousleiman said last week, adding that he was seeking to include them in the claim. “We want to bring this person to justice either in England as part of the current action or in some other way.” He declined to comment on the newly declared owner.

Slade declined to comment on Savaro’s ownership.

The company had sought to begin liquidation proceedings in January but that process has been halted by the lawsuit.

Abousleiman said other potential defendants could be pursued.