BY JENNIFER ZENG
March 26, 2019 Updated: March 26, 2019
While investigators are busy trying to figure out what may have caused the crashes of Boeing’s 737 MAX jetliners, a whistleblower who was formerly East Asia Supply Chain Manager of Boeing’s flight control system contractor has intensified his efforts to bring to light an issue that has been troubling him for the past three years: substandard parts made in China with non-aerospace material have been installed in Boeing 777 and 737 planes that are still in service.
Charles (Chaosheng) Shi worked for Moog Aircraft for ten years from 2006 to 2016. In 2006 he set up the Moog China supply chain and almost all approved suppliers were audited and approved by him except for the one he is 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 Trump. The FAA found that two of Shi’s concerns were substantiated, but the rest not.
He also reported this 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 Shi did with NBC back in February 2018, Shi expressed his 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.”
Shi also related to NBC another violation substantiated by the FAA concerning unbaked parts in Boeing 777 spoilers, with 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 take off, early flight, and landing.
Alarming Findings
Shi said, he became aware in 2015 that Suzhou New Hongji Precision Parts Co Ltd (NHJ) in Jiangsu Province, China, one of Moog’s suppliers, was reportedly using cheap and substandard materials.
He confirmed this 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 finding out that NHJ faked raw material certificates and used substitute materials resulting in B/E product failures, Shi said.
Shi said, as the manager for Moog Aircraft, he was responsible for the quality of the parts and materials it purchased from all suppliers, and had the right to audit the 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 .
Shi said to The Epoch Times, “NHJ was outsourcing Moog/Boeing business to other unknown and unapproved sub-contractors. One third of Moog business, which was Boeing plane parts, were outsourced to illicit sub-contractors during 2015-2017. And I am willing to testify to this under oath.”
FAA Investigation
Shi’s finding about outsourcing was confirmed by a FAA investigation conducted in September 2016. According to a FAA memorandum obtained through a freedom of information request, the following two allegations made by Shi were found “substantiated”:
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“Moog’s supplier NHJ outsourced Moog machined parts to an unknown supplier.
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“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
What most concerns 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 spoiler. This is a “Single Point Of Failure (SPOF)” part, which means if this part fails, the entire system will fail, which may cause a fatal accident.
According to a purchase list Shi provided, 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 could 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 has not responded to this 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 could not 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 (SDE) reported to him the NHJ had a bad history and B/E Aerospace stopped using the company.
He became very worried and reported this matter to his direct supervisor who brought NHJ into Moog. But his supervisor brushed it off.
Shi also conducted some auditing and investigative work on NHJ, and found that NHJ was using an “illicit material booking MID system (Material Identification),” which violated the standard of the aerospace industry. NHJ MID numbers had no traceability to raw material sourced from approved raw material vendors. “And this violation is totally not acceptable,” Shi said.
Shi also traveled to NHJ a few times after the discovery of the unacceptable record keeping, and found that NHJ stocked raw material for Moog in an open area. The material was mixed with other materials and was not properly labeled, he said. Some material had labels on them; some did not.
Shi also found that some Work in Process (WIP) paper work did not even have MID “traceability,” which means that NHJ had no traceability whatsoever in its manufacturing process.
On Aug. 7, 2015, Shi became a whistleblower within his company, 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 this 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 CEO of Moog Inc. and the President of Moog Aircraft about the “alarming safety threat.”
On Jan. 13, 2016, Shi took this matter to the U.S. FAA. On the same day, he was fired.
According to Reuters, Moog said Shi’s employment was ended as part of a “previously communicated global reorganization,” and was not 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, NY 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,” FAA concluded that Shi’s allegation was “not substantiated.”
In August 2016, Shi provided what he describes as more “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 the FAA to reopen the case.
The FAA did another round of investigation and found two items out of Shi’s nine allegations were “substantiated,” as mentioned earlier in this article.
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,” and 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 had discovered an “accounting error” that resulted in the discrepancy, which resulted in the agency determining this allegation was not substantiated.
Shi is not satisfied with FAA’s handling of this matter, even for 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 whistleblowing, 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 has not responded to requests for comment.
A Late Night Intrusion
Shi believes that 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 sped up his efforts by writing to U.S. Rep. Peter DeFazio and Rep. Brian Mast, as well as President Trump. He said he is 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 distrubing manner early in the morning 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 this intrusion was a warning, with the intruders demonstrating they could easily reach him. They want him, he said, to stop his efforts to expose the problems with NHJ’s parts.
Charles Shi attending the 2011 Conference of Commercial Aircraft Corporation of China, Ltd. (COMAC) in Shanghai, as both the East Asian Supply Chain Manager and C919 Program Manager for Moog. (Courtesy Charles Shi)
