This is outrageous and criminal in nature! Thanks to the whistle blower. I hope FAA is forced to act and extend investigations to other major suppliers and their supply chains.
- Gary McCartney, President and CEO AviationHubAsia Inc and Vice President of Operations of Asian Aeronautics Services Inc.
This FAA whistleblower (Charles Shi) was the founder of Moog Aircraft China Supply Chain back in 2006. I used to report directly to Kevin Walek, Director of Moog Aircraft Global Supply Chain. I myself developed almost all of China suppliers (except NHJ and XAE) through auditing and approval before 2012. These suppliers remain the supply base of Moog Aircraft today.
Kevin Walek, in the Middle, Accompanied by Charles Shi in a Chinese Supplier Visit in 2009
Moog Aircraft hired Joe Zou, an American citizen in 2013, by then VP of Supply Chain. Mark Trabert as Asian Supply Chain Director to be my supervisor.
Joe Zou, a Chinese American, Chinese Name Zou Yonghua
Mark Trabert, vp of Supply Chain, Moog Aircraft in 2012 Who Hired Joe Zou as Asian Supply Chain Director (Mr Trabert Is Now President of Moog Aircraft Group)
Joe Zou, 2nd to the Right, Seated, Charles Shi, First to the Right. Clarie Starzak, First to the Left, Seated
In early 2014, Joe brought in a verified Chinese counterfeiting supplier to Moog Aircraft supplier base, Suzhou New Hongji Precision Part Co., Ltd.(NHJ). Before Moog, NHJ had an aerospace customer B/E Aerospace who exited from NHJ in 2013 because NHJ falsified material certification and used excessively fake material in B/E Aerospace business resulting in product failures.
Moog quality lead Ms. Claire Starzak, through reckless and fraudulent practice admitted NHJ into Moog Aircraft approved supplier base. Ms. Starzak used to work as a junior quality engineer at Moog UK facility (Moog acquired from GE Aerospace in 2009) and had no supplier audit experience before she came to China in 2012. Ms. Starzak did what she called desk-top auditing to approve NHJ, meaning she approved NHJ from her laptop at her living apartment instead of going to NHJ for an on-site audit. The approval process was unknown to Moog Aircraft Supply Chain Practice. It was probably unheard of in the entire aerospace industry.
At Moog, we need to go to a potential supplier facility, check their documentation system, conduct workshop tours, ask questions and use a supplier checklist to audit and approve or disapprove a potential supplier.
The first question we shall ask is how the supplier document and maintain material traceability because this is most vital in aerospace business.
Ms. Claire Starzak, a Junior QE of GE Aviation Workshop Who Had No Experience of Supplier Auditing and Approving Before 2012
Moog Supplier Audit Checklist Used in Approving Potential Suppliers
If Ms. Starzak was a competent quality auditor and used Moog's standard supplier audit checklist, she could have easily identified the violation of NHJ by using illicit MID "traceability" and stopped approving NHJ as Moog approved supplier.
Then I learned more alarming violations from my SDEs that NHJ was not using required travelers to document the production and outsourcing Moog business from unknown & unapproved sub-tiers just because the limitation of its own capacity and shortage of machines.
I requested Ms. Starzak to conduct a supplier audit on those unknown sub-tiers. But Ms. Starzak squarely refused.
Reckless and Incompetent Moog SQE Refused to Audit Unknown Sub-Tiers
Before 2012, Moog Aircraft Asian Supply Chain had SDE performing all functions of supplier development, supplier quality and engineering support. A IPT(Internal Product Team) team structure was introduced in 2012 splitting the functions into three. So supplier audit and approval was handed over to SQEs who still reported to me dot line. (SQE get what to do from me in China).
Before Ms. Claire was a trained Moog employee, Moog Aircraft Supply Chain already had an established rule of approving sub-tiers.
It is Moog's responsibility of approving 2nd tiers recommended by 1st tier supplier's
Moog Aircraft Established Procedure of Approving Sub-Tiers
Since SQE lead refused to do what she should, I myself went to audit 4 of the sub-tiers which NHJ was telling Moog in making Moog parts either partially or completely. After two days of auditing with the SDE responsible for NHJ, our findings were extremely alarming. I wrote an audit report to Joe Zou.
Sender: Shi, Charles <xxxx>
Time: 2015-7-9 18:19
To: Zou, Joe <xxx.om>
CC: Sn <sg.com>; Rong, Ron <m>; g <.com>
Subject: New Hongji 2nd tier supplier visit and findings
XXX and I spend 2 days visiting 4 NHJ recommended 2nd tier suppliers, and this afternoon we sat down with CEO Mr Li Jian and his team sharing our findings.
All 4 2nd tiers are doing business with different industrial customers. Those customers may not have stringent traceability requirement like Aerospace does, This could cause their production system I'll coping with what is required by Moog, leaving easily mix up of lots...
Generally speaking the 2nd tiers don’t have an awareness of what Moog is requiring in terms of NC, lot control and traceability management. Even NHJ has blurred understanding and that is why we conducted improvement action two weeks ago trying to correct any variations of traceability management. If this fails, the result could be disastrous...
This morning we happened to hear a communication within themselves trying to buy one material from another company with a fake certificate. We felt this is something serious in violation of aerospace Raw Material controls. ...* see below testimony by Ms. Claire Starzak.
When visiting 4 the 2nd tier suppliers, asking each of them what Moog parts they are manufacturing. Only 2 acknowledged doing either certain ops or complete parts, but when we asked who is making CA81706 which xxx and Ron identified to have been outsourced, Nobody can tell us which 2nd tier is. This raised alarm as NHJ may take it into their own hand outsourcing Moog parts to unknown 2nd tiers, and this may raise red light right away.
Since 2nd tier supplier management process is something new to both NHJ and Moog, it may take more time to make the procedure completed. So in this afternoon summary meeting, Mr. Li agreed to hold new PO placement to NHJ for any parts they are planned to go with 2nd tier until the procedure and training and full compliance is in place.
I’d appreciate you review above and give us directions how we proceed before communication with larger groups.
Charles Shi | Far East Asia Supply Chain Manager, Aircraft Group
* Regarding above mentioned NHJ trying to fake a material certificate, it was evidenced later by Ms. Claire Starzak testimony in her report 25/08/2015 to Moog quality organization.
NHJ Was Trying to Falsify Material Certification for Moog Business
Sub-Tier Supplier Audit Report to Joe Zou 09/07/2015
Body of Audit Report to Joe Zou 09/07/2015
Joe replied agreeing with my reporting, but two weeks later, Joe Zou ordered my SDEs to expedite development of NHJ by giving NHJ and its unapproved sub-tiers more business. This raised the red light so I decided to report to Kevin Walek, Zou's supervisor on Zou's unethical misconduct.
I asked Mr XXX, the NHJ responsible SDE to do a product audit with that SPOF blocking of B737 focused so I could have evidences in reporting to Kevin Walek. Mr XXX came back on 07/08/2015 with extremely alarming findings. With his audit report, I started Moog internal whistleblowing on the same day by writing to Kevin Walek, Moog Aircraft Global Supply Chain Director.
Sender: Shi, Charles <g.com>
Time: 2015-8-8 4:38
To: Walek, Kevin <g.com>
Subject: concerns on Joe- confidential
Kevin, How are you!
I know this email might be very unexpected. However I need to take the step which is risky to my job security yet may do good to the company as a whole...
Please refer below email regarding NC we identified with this supplier New Hongji which was introduced by Joe since he joined Moog. Another incidence of traceability findings by XXX today is in the attached file.
We learned from multiple sources that the only aerospace customer New Hongji had prior to Moog, BE has revoked their business with New Hongji because NHJ substituted raw material that was found out at customer’s end. I reported this to Joe and he simply brushed it off with no request for deep investigation.
He requested nothing to demand NHJ take actions to correct the traceability NC (non conformance), but kept telling us it is normal for a supplier to have such issues!!! What issues, traceability is the biggest issue that can cause immediate disaster to aerospace business.
New hongji is not ready for aerospace machining because they are basically an industrial machining house, their 95 percent business does not require traceability and now Moog parts are mixed with their industrial machining and it is unavoidable operators don’t mind traceability. They don’t have the resources to manage. I repeatedly reminded Joe about it but he seems not hearing.
On the contrary, he was obsessed giving more business to NHJ and even requested NHJ use their 2nd tier supplier base which is nowhere near doing aerospace like Moog type of parts.
I visited their 2nd tier suppliers which has no training on treacebility, no awareness of aerospace requirement, and the owner of NHJ chose to outsource complete Moog parts to unknown 2nd tier sources with or without Joe’s knowledge.
I don’t know why Joe picked up NHJ and very head-strong using them and their 2nd tier suppliers, it is too risky compromising the integrity of Moog parts. However one thing I assume is that Joe must have some private dealings or kick-back arrangement with Mr. Li, the owner just because of the private ownership that allows them to do so. (Joe Zou registered a shell company)
Kevin, I’d like have a call with you at your convenience to talk things over.
1st Internal Whistleblowing to Moog Aircraft Global Supply Chain Head
(An US award winner & independent investigative journalist by his own probing discovered Mr Joe Zou, Chinese name Zou Yonghua registered a shell company in Detroit, Michigan where his home was based in 2015. The shell company is suspected of receiving kick-backs from Moog Chinese suppliers)
This suspicious shell company account can be easily checked out by FBI or law enforcement agencies when a criminal investigation is launched.
Shell Company - Shanghai Xing Kong Information Technology LLC. Registered by Joe Zou in 2015 When Fully Employed by Moog Aircraft
Joe Zou's shell company registration was in violation of Moog ethics.
Moog Employee Handbook Bans Alternative Employment
Moog Employee Handbook Bans Alternative Employment
Well, let us focus on the felony Moog committed in covering up the extraordinary aircraft safety threat. The devil was all in the Moog SDE audit 07/08/2015.
Moog SDE Mr. XXX Audit Report 07/08/2015
Mr. XXX audited a few production lots of SPOF blocking of B737 Spoiler which I told him to focus on. He checked 4 NHJ MID lots with a total quantity of 1006pcs.
Because NHJ production documentation only contain the MID lots, Mr. XXX demanded what material heat lots NHJ sourced to match these four MID lots. NHJ searched "very hard" and finally told Mr. XXX that these four MID lots were traced to three Heat lots sourced from Taiwan Gloria Material Technology (GMT) which was a Moog/Boeing approved raw material vendor.
However these four MID lots did not match the three heat lots of GMT by 10 pc difference. The traceability was lost.
NHJ Illicit mid Traceability Disconnect with Aerospace Material
When the finding alarmed Mr. XXX, he did a deep dive on the mismatch of MID by NHJ vs GMT Heat lots. He found two GMT lots had ISSUE and marked in red.
Moog SDE Finding of Heat Lots by Approved Raw Material Vendor Had ISSUE with Particular Heat Lot SD1850B-10G ISSUE Marked in RED
Throughout my whistleblowing process to Moog management and FAA, I repeatedly requested Moog and FAA to verify material facts with this SPOF P/N665A0039-02 focused. Both Moog and FAA refused and did not do any material verification.
I myself verified these three GMT lot in mid August,2016 and was confirmed by GMT sales person that they only sold NHJ 314pcs, not 1016pcs that NHJ was telling Moog but unfortunately Moog quality and FAA accepted without any verification.
Regarding GMT Heat lot SD1850B2-10G, NHJ falsified the quantity from 112pcs to 612pcs.
Transcript of GMT Confirmation of Sales, Admitted into Court Record by DOL ALJ Judge
FAA reached a no violation substantiated verdict on 1st June,2016 by accepting outrageous Moog forgery that Moog checked all lots delivered to Moog since October 2014, including all the raw material certificates for P/NP665A-0039-02(That SPOF of B737 spoiler)...material providers confirmed they shipped the material type, specification, and quantity indicated on the material Certificate of Conformance.
FAA Investigation Report 01/06/2016
When Moog forgery of having verified material facts by January 2016, was destroyed by above-mentioned A-One bombshell compelling evidence submitted to FAA investigation in August, 2016. Moog forged another deceit to cover the old ones.
Moog was asked by FAA to verify and Moog did "verifying" in September 2016 by making new forgeries which were unfortunately accepted again by FAA in its abusive report.
In FAA report 04/11/2016, the MIDO investigator stated "that (7th Sept, 2016) Moog discovered an accounting error...during a 2015 (before May 27,2015) audit....first, a single billet...was large enough to produce two finished parts, second, multiple raw material certifications were reported under a single material certification number."
FAA Abusive Investigation Accepting Moog Forgery
However, the quantities of the 3 GMT lots of 314pcs did not make up 1016pcs NHJ falsified that in turn had nothing to do with the four MID lots of fake material NHJ used in making SPOF of B737 planes.
Therefore NHJ/Moog/FAA made another forgery by adding a "4th GMT lot" which was not even on the only authentic audit report 07/08/2015.
But Moog did a very bad job forging this time. The dire fact is: GMT Heat Lot SC282A5-10G was non existent!!!
NHJ/Moog/FAA Added the 4th GMT Heat Lot Which Was Forged and Non Existent
A US senior investigative journalist contacted GMT to verify the 4th lot Moog/FAA attempted to make up the quantities NHJ falsified. GMT Aerospace Sales Director Jacky Chiu responded 09/11/2017.
"SC282A5-10G April 20, 2015 (This is not an existing No. in our production. We produced SC0282-..but do not produce SC0282A5-.. There is no SC1282A5-..either. And SC0282- is material 440C instead of 15-5PH.)"
evidence exclusively disclosed
Confirmation by GMT the 4th Lot Added by Moog/FAA Was Non Existent- Evidence Exclusively Disclosed
From testimony by B/E Aerospace insider on 02/02/2017, NHJ used copies of certificate by shipping material not meant by those certificates. NHJ used same criminal scheme in faking Moog business.
B/E Insider Testimony on NHJ Criminal Scheme of Counterfeiting-Transcript Admitted by US Law Judge
B/E Insider Testimony-Continued
NHJ Own Employees Admitting They Were "Counterfeiting Brigade," If Caught, They Would Be Arrested and Ended up in Jail...
B/E Insider Testimony-Continued
NHJ was the exclusive supplier for the part P665A0039-02, the single point of failure (SPOF) blocking of B737 spoiler since 2015. It is believed some 500 B737 have been compromised due to installing this safety critical counterfeit SPOFs.