Boeing has agreed to plead guilty to fraud to avoid going on trial in the United States on charges stemming from two fatal crashes involving its 737 Max.
Under the plea deal, Boeing would pay a fine of $243.6m and be required to invest at least $455m in its compliance and safety programmes, the US Department of Justice said in a court filing on Sunday.
The aircraft giant would also agree to be subject to a third-party monitor’s assessment of its safety and quality procedures for three years.
“We can confirm that we have reached an agreement in principle on terms of a resolution with the Justice Department, subject to the memorialisation and approval of specific terms,” Boeing said in a statement.
The plea agreement announced on Sunday only relates to Boeing’s culpability in relation to the 737 Max crashes in 2018 and 2019, not other incidents that have raised questions about the company’s safety standards, including the mid-flight blowout of Alaska Airlines flight 1282 in January.
The deal, which requires the approval of a federal judge, also only covers the corporation of Boeing, not any current or former employees.
Boeing’s guilty plea could potentially cost the company government contracts that account for about 40 percent of revenues as US agencies can use a criminal conviction as grounds to exclude a bidder.
The aircraft maker, however, could seek waivers to continue doing business with the government and it is debatable whether agencies such as the US Department of Defense and NASA would be willing to forgo such an important supplier.
In 2003, the US Air Force waived a decision to suspend several Boeing units from bidding on contracts following “serious and substantial violations of federal law” to award the aircraft giant a $56m satellite project.
Boeing’s decision to plead guilty comes after the Justice Department in May said it had determined that the company violated an earlier deferred prosecution agreement stemming from the 737 Max crashes, which killed 346 passengers and crew.
As part of the 2021 settlement, prosecutors agreed not to press charges against Boeing for misleading regulators about flaws in the 737 Max if Boeing paid a $2.5bn settlement, including a $243.6m fine, and promised to comply with certain conditions for three years.
Under the deal, the aircraft manufacturer admitted it had deceived the Federal Aviation Administration about its Maneuvering Characteristics Augmentation System (MCAS), a flight stabilisation software programme that was linked to both crashes.
Lawyers for some of the relatives of the victims said they would ask the Texas court where the plea will be entered to reject the agreement.
“This sweetheart deal fails to recognize that because of Boeing’s conspiracy, 346 people died,” Paul Cassell, a lawyer for some of the families, said in a statement.
“Through crafty lawyering between Boeing and DOJ, the deadly consequences of Boeing’s crime are being hidden.”
