UPDATE 2-U.S. lawmakers press Boeing CEO on 737 MAX development

David Shepardson

(Adds details from the hearing, photo)

WASHINGTON, Oct 30 (Reuters) - Boeing Co Chief Executive Dennis Muilenburg faced a second day of questions on Wednesday from U.S. lawmakers on the company's now-grounded 737 MAX after sharp criticism at a Senate hearing Tuesday.

U.S. Representative Peter DeFazio, who heads the House Transportation and Infrastructure Committee, kicked off the hearing by criticizing Boeing for "a lack of candor" over the jetliner's development, and asked why Boeing approved a safety-critical flight control system known as MCAS - linked to two deadly crashes - vulnerable to a single point of failure.

DeFazio also questioned why Boeing scrapped initial plans to install an MCAS "annunciator" alert and how pilots could be expected to recover if the system failed, when Boeing failed to disclose details on MCAS system to pilots.

"I've talked to a lot of pissed off pilots," DeFazio said.

"We need answers. We need reforms on how commercial aircraft are certified," and how manufacturers like Boeing "are watched" by regulators, he added.

Muilenburg had not yet been given a chance to respond to opening comments by DeFazio or other House members.

In an earlier statement, DeFazio said the panel is aware of "at least one case where a Boeing manager implored the then-vice president and general manager of the 737 program to shut down the 737 MAX production line because of safety concerns." Boeing did not comment Tuesday on the allegation.

The hearing, the highest-profile congressional scrutiny of commercial aviation safety in years, heaps pressure on a newly rejiggered Boeing senior management team fighting to repair trust with airline customers and passengers shaken by an eight-month safety ban on its 737 MAX following two crashes that killed 346 people.

Muilenburg told reporters on Wednesday he believes the allegation was in response to concerns about a change in the increase of the production rate. He said Boeing was aware of those concerns and had acknowledged them.

Muilenburg said that he had met with some family members of the victims before the Wednesday's hearing. "It was tough to hear," he said, adding the company was making "the fixes we need to make."

The Boeing CEO on Tuesday acknowledged errors in failing to give pilots more information on a key safety system known as MCAS before the crashes, as well as for taking months to disclose that it had made optional an alarm that alerts pilots to a mismatch of flight data on the 737 MAX.

"We've made mistakes and we got some things wrong. We're improving and we're learning," he said.

On Tuesday, U.S. senators expressed dismay that 2016 instant messages discussing erratic behavior of simulator software - a replica of the system aboard the jetliner - did not prompt an immediate reaction from the company.

For months, Boeing had largely failed to acknowledge blame, instead vowing to make a "safe plane safer." Tuesday's hearing represents Boeing's broadest acceptance of responsibility that it made mistakes, but Muilenburg stopped short of what some lawmakers and family members had sought.

As they were at Tuesday's Senate hearing, family members of victims were seated closely behind Muilenburg on Wednesday at the House hearing.

On Tuesday, Nadia Milleron, whose daughter was killed in the Ethiopian Airlines crash in March, said Muilenburg and the board should resign for failing to do more to prevent the crashes.

As Muilenburg departed Tuesday's hearing, she implored him to look at the victims' families when he apologized. He turned to her and said: "I'm sorry." (Reporting by David Shepardson; Editing by Stephen Coates and Steve Orlofsky)