This ‘Counterfeit Titanium in Boeing Aircraft’ news report is an example of how to conduct an incident review with vague but urgent details. This is an excellent opportunity to (1) review a product fraud concern, (2) document fraud, and (3) apply the Food Fraud Suspicious Activity Report (FFSAR).
One week ago on Friday, June 14, the New York Times published “F.A.A. Investigating How Counterfeit Titanium Got into Boeing and Airbus Jets*.” I conducted this review later that afternoon. No further research was undertaken or needed to answer our research question about applying an incident review process. This blog post will cover the thought process to assess the source of information, assess the issue with the information available, consider what additional information is needed, and then also consider other factors that may help when conducting a product fraud vulnerability assessment.
[*Update June 24, 2024 – The news publisher updated the article title wording from ‘Counterfeit Titanium’ to ‘Questionable Titanium.’ There were no other changes to the article other than adding a generic comment from the European Union Aviation Safety Agency.]
Using One News Source – How Do You Authenticate the ‘Counterfeit’ Claim?
I read this article with intense interest. I started writing a summary and blog post, then realized I only considered the information from ONE news source. Here is a review of the details and the incident review thought process:
- The exact quote from the title was syndicated or reposted in other news sources 49 times – but it looks like one reporter has received the FAA report (which could be that the reporter attends local meetings or closely monitors early releases such as in the Federal Register notices).
- The exact quote from the first 20 words of the first paragraph was syndicated or reposted in other news sources 67 times.
- Another international news source stated, “The inquiry was first reported Friday by The New York Times.” In that article, the incident was qualified by a confirmation from the agency: “The FAA said in a statement to HuffPost that it is looking into the scope and the impact of the issue.”
- The news article was published on Friday, June 14, and the latest FAA.gov website news was from the day before on Thursday, June 13 – they may have an approval deadline so it is possible that more reports will be posted next week.
- There was no recent FAA.gov ‘press release’ with the word ‘titanium.’
- The most recent FAA.gov press release with the word ‘Boeing’ was from a month ago.
- The Boeing corporate site does not mention this issue.
- So, many details are quoted from a government report, including confirmation from the agency. The primary source is not yet available, so we operate with secondhand information.
- Conclusion: At this point (later in the morning of the news item publication), this is an unconfirmed and unverified ‘suspicious incident,’ which could have catastrophic consequences. I am writing this later that day, and there is no public statement from the Federal Aviation Administration (FAA – the overseeing agency) or the companies that supposedly reported the information to the FAA. Since it was Friday and the weekend was coming, it may be three days later on Monday before new press releases or reports are made public.
- Call to Action: It is good to review the information and consider possible risk treatments for affected parties. If anything, it is wise to conduct a preliminary review and update your management that you are monitoring the issue. As we have often heard, the Board of Directors/ C-Suite/ VPs don’t like surprises, and they don’t want to be blindsided by new problems – it is ideal to update them BEFORE they even hear about this news item.
Brief Incident Review from the News Article
On June 14, the New York Times reported that the US Federal Aviation Administration (FAA) started an investigation on ‘counterfeit titanium’ in Boeing and Airbus airplanes.
The news report mentions an FAA statement (that was not yet publicly available yet). “Boeing reported a voluntary disclosure to the FAA regarding procurement of material through a distributor who falsified or provided incorrect records.” Also, “Boeing issued a bulletin outlining ways suppliers should remain alert to the potential of falsified records” (that was not publicly available yet).
The titanium is used in critical aircraft components: “The falsified documents are being investigated by Spirit AeroSystems, which supplies fuselages for Boeing and wings for Airbus.”
It is still unclear exactly how the problem was found, but there was a mention that “The investigation comes after a parts supplier found small holes in the material from corrosion.” It is unclear whether this next statement is connected with the corrosion, but “[Titanium International Group] that bought the titanium from Turkish Aerospace Industries noticed that the material looked different from what the company typically received” and “[They] also found that the certificates that came with the titanium seemed inauthentic.” “The issue appears to date to 2019 when a Turkish material supplier, Turkish Aerospace Industries, purchased a batch of titanium from a supplier in China.”
So, the supply chain appears to be:
- Raw materials (undefined supplier but it was supposed to have been from Baoji Titanium Industry) – ores or raw natural resources (this would include statements of the material content as well as the country of origin)
- Plus, a distributor said they bought the product from Baoji.
- Raw titanium (Turkish Aerospace Industries) – manufactured blocks, bars, tubes, sheets, or possibly powders (this would include the processing methods and quality control)
- Aircraft part manufacturer (Titanium International Group) – a valve or bolt (this would also include processing methods and quality control)
- Aircraft component manufacturer (Spirit AeroSystems) – a piece of equipment
- Aircraft (Boeing and Airbus)
The specific concerning documents are those that address details of the raw material, production process, and performance: “The documents in question are known as certificates of conformity. Spirit officials said they serve somewhat as a birth certificate for the titanium, detailing its quality, how it was made and where it came from.”
A Spirit AeroSystems representative said, “Our quality management process relies on the traceability of the raw materials all the way from the mills” and “There has been a loss of traceability in that process and a documentation challenge.” This could lead to a problem: “Spirit officials said they had started testing titanium parts to ensure aviation-grade material was used.” The bottom line is performance: “So far, Spirit’s testing has confirmed that the titanium is the appropriate grade for airplane manufacturers. However, the company has not confirmed that the titanium was treated through the approved airplane manufacturing process. The material passed some of the materials testing performed on it but failed others.”
A key point is that the airlines said they had conducted performance tests on their titanium components: “Boeing and Airbus both said their tests of affected materials so far had shown no signs of problems.”
A concerning detail is the duration of the period of concern: “The planes that included components made with the material were built between 2019 and 2023.”
When considering the information in this news article, document fraud was conducted on a ‘certificate of conformity.’ Specifically, the document fraud led to a gap in the traceability of the product and attribute testing back to the source. This lack of traceability led to a lack of being able to confirm that the correct aircraft grade titanium was used. This document fraud was accompanied by concerns about corrosion in the parts. Overall, the lack of traceability leads to the inability to confirm that the parts conform to specifications.
Need for Additional Information
As noted, so far, the incident has only one source of information – and that is a secondary source. Key additional information would be to find ALL the primary sources. In this case that would be the FAA statement or report, any public statement from Boeing or any of the suppliers, and then also to conduct supply chain mapping to understand the exact possible product flow, participants, and documents.
Other Considerations (E.g., Direct or Related US Federal Register Notices)
A new incident should always be reviewed in detail, but any other ongoing issues should also be considered. There were two Federal Register notices that I found from keywords ‘Boeing’ or ‘titanium’ and postings within the last week:
- On May 17, the open comment period for a ‘Notice of proposed rulemaking on Airworthiness Directives; The Boeing Company Airplanes’ was posted for public comments that are due July 1. The notice mentioned substandard or incorrect material specifications, titanium grade, and even the use of seat bolts could lead to “loss of control of the airplane.” “This proposed AD was prompted by reports that some floor beam side-of-body fittings have been manufactured with an incorrect material type.” Also, “The incorrect material type is… unalloyed titanium, which has significantly reduced strength, fatigue, and damage-tolerance properties compared to the type design grade titanium…material.” “The failure of multiple adjacent fittings may lead to the inability of the surrounding principal structure elements to sustain limit loads and damage to critical systems under the floor; these conditions could cause loss of control of the airplane.”
- A pre-publication report will be made public next Tuesday, June 18, on ‘Final Rule on Additional Sanctions against Russia and Belarus under the Export Administration Regulations and Refinements to Existing Controls.’ I found this from the keyword ‘titanium’ and postings within the last 30 days. The list of products includes the Harmonized Tariff Schedule (HTS) item ‘261400 TITANIUM ORES AND CONCENTRATES.’ This could suggest there is excess raw materials on the marketplace and an increased fraud opportunity. Also, “These entries are listed on the Entity List under the destinations of the People’s Republic of China (China) and Russia and have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States.”
Comparison of the Aircraft and Food Supply Chain Mapping – Key Documents
While this is an airline industry incident, the details apply to the food industry. A parallel could be the melamine in infant formula and pet food incidents. The basic supply chain partners are similar to the food industry. Also, there are similar key documents such as invoices for payment, bill of materials/ bill of lading for the quantity, bill of materials (the identification of the product), certificate of analysis/ certificate of conformance, and country of origin. Finally, there are possible checks of the authenticity or quality performance of the products that are received.
As with food fraud prevention, a key is to conduct supply chain mapping to understand the flow of products AND where vulnerabilities may occur. The current incident, other factors, and enterprise-wide risk are taken into account when considering the likelihood and consequence. The consequence could be amplified beyond just this incident if there are other factors to consider.
- Producers or farmers (the raw components to make titanium)
- Pre-Processing (processed commodity with some additives)
- Manufacturing (the processing method and additives to create the high-performance aircraft part) the food item, and then retailing (the airline)
- Assembly (the parts being used to build an airplane)
- Retail (the airline that uses the planes)
Then, a vulnerability assessment should be conducted to understand where additional countermeasures or control systems might be appropriate or helpful. Finally, a product fraud prevention strategy should be followed, with the risk tolerance or risk appetite defined by the overall Enterprise Risk Management (ERM/ COSO) type system.
For the aircraft ‘counterfeit titanium’ incident, there is not yet enough information to understand the overall product fraud vulnerability or the prevention strategies that are in place.
[Personal application: I have a flight on Tuesday, and I just checked the airline for the aircraft detail… I fly on an Airbus A320 and Airbus A319, which are not on the list of models that used the suspicious products.]
Takeaway Points
- Food fraud prevention methods and processes are based on general risk management concepts, so they apply to any product fraud incident, such as the ‘counterfeit titanium’ in Boeing aircraft.
- There are often product fraud suspicious activity reports that are very concerning but do not have much detail or many primary source documents.
- While this article focused on the ‘counterfeit titanium’ for a few parts, what other part could be compromised from other fraudulent raw materials? Without an enterprise-wide product fraud vulnerability assessment, that answer is unknown.
[Note: if you would like to add comments to this blog post or provide suggestions for a future topic, please see my entry on LinkedIn. For example, are you interested in a deep dive into the ‘counterfeit titanium’ incident?]
References:
NYT, New York Times, F.A.A. Investigating How Counterfeit Titanium Got Into Boeing and Airbus Jets, by Mark Walker, June 14, 2024, URL: https://www.nytimes.com/2024/06/14/us/politics/boeing-airbus-titanium-faa.html