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The Morning Risk Report: Behind the Alaska Blowout: a Manufacturing Habit Boeing Can’t Break
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Good morning. Months before a piece of a Boeing 737 blew out midflight, leaving a door-sized hole in its side, the plane spent nearly three weeks shuffling down an assembly line with faulty rivets in need of repair.
Workers had spotted the bad parts almost immediately after the plane’s fuselage arrived at the factory, federal investigators have said. But they didn’t make the fix right away and the 737 continued on to the next workstation. When crews completed the repair 19 days later, they failed to replace four critical bolts on a plug door they had opened to do the job, leading to the Jan. 5 accident on an Alaska Airlines flight.
At Boeing, there is a term for situations such as this one, when work is completed out of the production line’s ordinary sequence: traveled work.
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A long history: For years, Boeing executives have tried and failed to break the habit of traveled work. Four years ago, in the aftermath of a pair of fatal MAX crashes, Boeing laid out five values central to improving safety. Number three on the list: eliminate traveled work. Doing work out of order further complicates the already intricate, often-taxing process of putting together an airplane.
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How Boeing is addressing the problem: Last week, Boeing told staff it was changing how it determines pay for tens of thousands of nonunion employees—from mechanics in South Carolina to its top brass. Quality measures, such as reducing traveled work, will now determine 60% of the annual bonuses for those working on its commercial aircraft.
Related: Incident on Latam Flight Injures Dozens Aboard Boeing 787 Dreamliner
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Content from: DELOITTE
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On the Board’s Agenda: 5 Issues Testing Governance
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Risks and opportunities touching on geopolitical, economic, regulatory, and technology issues will likely rise to the top of board agendas sometime this year. Consider actions and strategies for more effective governance during challenging times. Keep Reading ›
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2024 Risk & Compliance Survey
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We invite readers to take part in our 2024 Risk & Compliance Survey. It will only take a few moments of your time, and your insights will inform industry trends and enhance our community knowledge. We hope to present aggregated results in a future edition of Risk & Compliance Journal.
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Software company Autodesk made some nominal investments to enhance its team’s skills and capacity over the past year, making it well-positioned to comply with the new SEC rule. PHOTO: RAFAEL HENRIQUE/ZUMA PRESS
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Weakened SEC climate rule still comes with cost challenges for companies.
The Securities and Exchange Commission may have dialed back the extent of its new corporate climate-disclosure rule, but finance chiefs still face plenty of challenges and costs as they prepare to comply.
“There is still a significant amount of work that people will need to do to figure out what disclosures they’re going to make,” said Eric Juergens, a corporate partner at law firm Debevoise & Plimpton. “Even if they’ve done a good portion of the work, there will be more to do.”
The most challenging part of the rule for companies will likely be obtaining a high level of assurance on their Scope 1 and 2 greenhouse-gas emissions.
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Nvidia said its NeMo artificial intelligence platform was created in full compliance with copyright law, after a group of authors filed a class-action complaint saying that the chip maker used some of their books without permission to train its models.
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41%
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Percent of chief audit executives that are using or plan to use generative AI in the next 12 months, according to a new Gartner survey.
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U.S. national security adviser Jake Sullivan at the U.S. Capitol. EVELYN HOCKSTEIN/REUTERS
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Biden’s national security adviser navigates a world of chaos.
In wars spanning Afghanistan, Ukraine and now Gaza, Jake Sullivan, President Biden’s national security adviser, is the man in the middle, trying to negotiate between allies and enemies, and sometimes among warring U.S. government agencies. Supporters credit him with putting together a Western coalition to respond to Russia’s invasion of Ukraine, preventing a potential second front in the Israel conflict, and ramping up export controls on semiconductors and other cutting-edge technology as part of a blueprint for slowing China’s competitive advantage.
“Every day, I toggle between guns and butter,” Sullivan told The Wall Street Journal, describing the guns as the wars in the Middle East and Europe, and the butter as the work with allies to enhance and protect the American economy.
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The top U.S. military official in South Korea said his thinking has changed on deterring North Korea’s nuclear weapons. In the past, efforts were dedicated to halting Pyongyang’s development of nuclear capabilities. Now the focus is on preventing Kim Jong Un from using the weapons.
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India has successfully conducted the maiden flight test of an indigenously developed ballistic missile capable of carrying multiple warheads, Prime Minister Narendra Modi said Monday, a development that enhances the country’s nuclear deterrence against rivals China and Pakistan.
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French President Emmanuel Macron, who once sought to negotiate with Russian President Vladimir Putin, has emerged as one of the West’s most outspoken Russia hawks, forcing Europe into a potentially decisive moment over Ukraine as U.S. backing for Kyiv is blocked in Congress.
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Thousands of Muslims attended Ramadan prayers at Jerusalem’s most sensitive religious site on Monday evening, after clashes a day earlier between visitors and Israeli police heightened tensions at the start of the Islamic holy month.
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President Biden proposed Monday a $7.3 trillion budget for the next fiscal year that would raise taxes on wealthy people and large corporations, trim the deficit and lower the costs of prescription drugs, child care and housing.
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Former President Donald Trump has become a wild card in the fight over the future of TikTok as the House nears a vote Wednesday on a bill that would force the company’s Beijing-based parent to either shut down or separate its U.S. operations.
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The U.S. bolstered its position as the world’s dominant arms exporter, accounting for more than 40% of the global trade in weapons over a recent five-year period, while Russia saw its sales abroad drop by more than half.
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