Boeing has agreed to plead guilty to a criminal fraud conspiracy charge to resolve a U.S. Justice Department investigation linked to two 737 MAX fatal crashes, where 346 people lost their lives in Indonesia and Ethiopia in 2018 and 2019. This plea would brand the planemaker as a convicted felon and require them to pay a criminal fine of $243.6 million. Boeing faced prosecution after violating a settlement in 2021. The guilty plea could jeopardize future government contracts, but it avoids a contentious trial and allows the company to move forward with a new CEO later this year.
In addition to the guilty plea and fine, Boeing has agreed to invest at least $455 million over the next three years to strengthen its safety and compliance programs. A third-party monitor appointed by the Department of Justice will oversee the company’s compliance and file annual reports on their progress. The plea agreement offered by the DOJ involved charges of conspiring to defraud the Federal Aviation Administration in connection to a software feature on the MAX planes linked to the fatal crashes.
The families of the crash victims have criticized the plea agreement as a “sweetheart deal” and vowed to oppose it in court. In-flight incidents in January further exposed safety and quality issues at Boeing, leading to a panel blowing off a new Boeing 737 MAX 9 jet during an Alaska Airlines flight. The MCAS software feature tied to the crashes automatically pushes the airplane’s nose down in certain conditions and was related to the grounding of the planes for 20 months, costing Boeing $20 billion.
Boeing’s board of directors will meet with relatives of the crash victims as part of the agreement, which does not shield any executives from potential charges. The agreed penalty will be Boeing’s second fine of $243.6 million related to the fatal crashes, bringing the total fine to the maximum allowed. Families of the victims have previously criticized the settlement and called for a higher penalty of up to $25 billion. Investigations into Boeing’s breach of the 2021 deal have been ongoing, with the DOJ holding meetings with victims’ families.
The guilty plea and fine are part of Boeing’s efforts to resolve the legal issues stemming from the MAX crashes and the company’s response to them. This agreement will have implications for Boeing’s future business prospects, especially in securing government contracts. By accepting responsibility for their actions and investing in safety and compliance programs, Boeing aims to rebuild trust and move forward from the devastating consequences of the fatal crashes. The involvement of a third-party monitor will ensure ongoing oversight of Boeing’s compliance efforts and help prevent similar incidents in the future. This resolution marks a significant step in holding Boeing accountable for the lapses that led to the tragic loss of lives in the 737 MAX crashes.
