8-7-2024 (WASHINGTON) In a significant development in the ongoing saga of Boeing’s 737 Max crisis, the aerospace giant has agreed to plead guilty to a criminal fraud conspiracy charge, according to a U.S. Department of Justice (DOJ) official. This plea, which awaits federal court approval, stems from a DOJ investigation into two fatal 737 Max crashes that claimed 346 lives in Indonesia and Ethiopia between 2018 and 2019.
The proposed agreement would see Boeing branded as a convicted felon and required to pay a substantial criminal fine of $243.6 million (£190.8 million). This development marks a pivotal moment for the company, potentially jeopardising its ability to secure lucrative government contracts with entities such as the U.S. Department of Defense and NASA, though waivers may be sought.
Boeing’s exposure to criminal prosecution arose after the DOJ determined in May that the company had violated a 2021 settlement related to the fatal crashes. While the plea agreement spares Boeing from a potentially damaging public trial, it nonetheless represents a significant admission of wrongdoing.
As part of the deal, Boeing has committed to investing at least $455 million over the next three years to bolster its safety and compliance programmes. The DOJ will appoint an independent monitor to oversee the company’s adherence to these commitments, with annual progress reports to be filed publicly with the court.
The charge specifically relates to Boeing’s conduct prior to the fatal crashes, focusing on knowingly false representations made to the Federal Aviation Administration (FAA) regarding a key software feature used on the Max. This feature, the Manoeuvring Characteristics Augmentation System (MCAS), was designed to automatically adjust the plane’s nose downward under certain conditions but was implicated in both crashes.
The agreement does not shield Boeing from potential investigations or charges related to more recent incidents, including the January 2024 in-flight blowout of a panel on a new Boeing 737 Max 9 jet during an Alaska Airlines flight.
Notably, the plea deal requires Boeing’s board of directors to meet with relatives of those killed in the Max crashes. However, some families of the victims have criticised the agreement as a “sweetheart deal” and vowed to oppose it in court.
This latest fine of $243.6 million represents Boeing’s second penalty of this amount related to the fatal crashes, bringing the total fine to the maximum allowed. The company had previously paid this sum as part of a $2.5 billion settlement in 2021.
