Boeing to plead guilty in relation to fatal 737 MAX crashes
In a court filing on Sunday, July 7, the government announced that Boeing has consented to a $243.6 million fine and a guilty plea to a criminal fraud conspiracy charge to resolve a US Justice Department investigation into two 737 MAX fatal accidents.
The plea agreement, which necessitates the sanction of a judge, would designate the planemaker as a convicted felon about crashes in Indonesia and Ethiopia that occurred over five months in 2018 and 2019, resulting in the deaths of 346 individuals.
The settlement was met with immediate criticism from the families of the victims, who desired that Boeing be subjected to a trial and endure more severe financial repercussions.
The ongoing crisis that has enveloped Boeing since a separate January in-flight blowout exposed the planemaker’s continuing safety and quality issues. This crisis was further exacerbated by the Justice Department’s (DOJ) drive to charge Boeing.
A guilty plea may jeopardize the company’s capacity to secure lucrative government contracts with the US Defense Department and NASA, although it may pursue waivers.
Boeing was subject to criminal prosecution in May after the Justice Department determined that the company had violated a 2021 settlement regarding the fatal collisions.
However, the plea prevents Boeing from facing a contentious prosecution that could have further embroiled the company in public scrutiny for its decisions prior to the fatal crashes. It would also facilitate the planemaker’s efforts to advance as it pursues approval for its proposed acquisition of Spirit AeroSystems, as it will have a new CEO later this year.
A Boeing spokesperson verified that the company had “reached an agreement in principle on the terms of a resolution with the Justice Department.”
As part of the agreement, the aircraft manufacturer committed to investing a minimum of $455 million over the next three years to enhance its safety and compliance initiatives. According to the filing, Boeing’s board will be required to convene with the relatives of those who perished in the MAX disasters.
The agreement also mandates the appointment of an independent monitor who must submit annual progress reports to the public to supervise the company’s compliance. Boeing will be subject to probationary status during the monitor’s three-year term.
The attorneys representing the victims’ families have indicated that they intend to urge Judge Reed O’Connor, who has been responsible for the case, to decline the agreement.
They cited O’Connor’s statement in a February 2023 ruling in a separate document submitted to the court, which stated that “Boeing’s crime may properly be considered the deadliest corporate crime in US history.”
“The agreement is a slap on the wrist,” stated Erin Applebaum, a lawyer at Kreindler & Kreindler LLP who is representing the relatives of some of the victims.