For airplane manufacturer Boeing (BA) , it has been a year of steadily worsening news.
While the recent focus has been on the blown-out door plug on a 737 Max 9 Alaska Airlines (ALK) plane that led to a federal investigation and the stepping down of CEO Dave Calhoun, Boeing's troubles with the Boeing 737 Max go back to two crashes that occurred within a few months of each other in October 2018 and March 2019.
After similar crashes on different airlines using the same type of aircraft led to the death of 346 people, the Boeing 737 Max was grounded between March 2019 and December 2020.
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On June 7, the U.S. Justice Department released a court filing stating that Boeing has agreed to plead guilty to a felony charge of conspiring to defraud the federal government around the investigation of the crashes. A settlement that ordered Boeing to pay $2.436 million in fines had been reached in 2021 but back in May, prosecutors accused the aircraft manufacturer of violating the terms by failing to adequately set up balances for detecting future safety violations.
'We can confirm that we have reached an agreement'
Between the option of entering a guilty plea or facing a trial on a charge of conspiracy to defraud the United States, Boeing has accepted the plea deal. If the plea is accepted by a federal judge, Boeing will need to pay another $243.6 million fine (the maximum allowed by law in such cases) and allow an independent monitor to oversee its safety and quality procedures over the next three years. The deal also requires Boeing to invest a minimum of $455 million in various safety and compliance programs.
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"We can confirm that we have reached an agreement in principle on terms of a resolution with the Justice Department, subject to the memorialization and approval of specific terms," Boeing said in a statement on the deal.
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Many torn on whether plea is a 'sweetheart deal' or a major step forward
The guilty plea is significant given that the aircraft manufacturer has not pled guilty to a charge since a 1989 data breach case around receiving classified Pentagon documents on the government budget. Publicly admitting guilt in the 737 Max incident works to further shatter Boeing's reputation at a time when another investigation into the production of the 737 Max 9 is ongoing. That said, many are already speaking out about how this is a way to avoid a public trial and airing of improper safety practices for which the families of those killed in the 2018 and 2019 crashes have been pressing.
"This sweetheart deal fails to recognize that because of Boeing’s conspiracy, 346 people died," Paul Cassell, an attorney representing some of the families of those killed in 2018 and 2019, told BBC. "Through crafty lawyering between Boeing and DoJ, the deadly consequences of Boeing’s crime are being hidden."
The Justice Department clarifies that the plea deal is exclusively for the 2018 and 2019 incidents and does not give Boeing immunity for other safety incidents such as the 2024 Alaska Airlines flight.
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