A 'sweetheart deal' for Boeing
A Boeing 737 MAX 8 sits outside the hangar during a media tour of the Boeing 737 MAX at the Boeing plant in Renton, Washington December 8, 2015. Photo: REUTERS
Boeing will plead guilty to a criminal fraud charge linked to the crashes of two 737 Max jets, which killed 346 people. The plea deal follows the US Justice Department's decision that Boeing violated a previous agreement protecting it from prosecution.
Key setails:
- Charge: Boeing is accused of conspiracy to defraud the U.S. by deceiving regulators about the 737 Max's flight-control system.
- Plea deal: Boeing will plead guilty and pay an additional $243.6 million fine, matching a previous settlement. An independent monitor will oversee Boeing's safety for three years. Boeing must also invest at least $455 million in compliance and safety programs.
- Approval: The plea deal requires a federal judge's approval. A court filing is expected by July 19.
Background:
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- Crashes: The crashes occurred in Indonesia (October 2018) and Ethiopia (March 2019). Both involved the Max's flight-control software.
- Previous settlement: In 2021, Boeing paid $2.5 billion, including a $243.6 million fine, to avoid prosecution, contingent on compliance with certain conditions.
- Breach: Last month, prosecutors claimed Boeing breached this settlement's terms.
Victims' families:
- Opposition: Families of crash victims plan to ask the judge to reject the plea deal, arguing it fails to hold Boeing accountable for the deaths.
- Statement: Lawyer Paul Cassell criticised the agreement as a "sweetheart deal" that hides Boeing's culpability.
Implications:
- Government contracts: Boeing's status as a federal contractor could be at risk. The Air Force previously allowed Boeing to compete for contracts citing "compelling national interest."
- Industry impact: Boeing, a major defense contractor, employs 170,000 people, with 37% of its revenue from U.S. government contracts.
Next steps:
- Court decision: The judge will decide whether to accept the plea and the proposed sentence or demand new negotiations.
- Ongoing scrutiny: A January incident where a panel blew off a Max jet has led to increased scrutiny and a new investigation by the Justice Department.
Bottom Line: Boeing's guilty plea addresses past misconduct but leaves unresolved issues about its future as a federal contractor and broader accountability for corporate actions.
