Boeing will plead guilty to conspiracy to deceive the United States in connection with the two fatal 737 Max crashes. The agreement with the Justice Department includes a fine of up to $487 million, which is significantly lower than the $24.8 billion sought by the victims' families.
Details about the guilty plea
The guilty plea involves Boeing admitting to defrauding the Federal Aviation Administration (FAA) during the 737 Max certification process. Following the 2018 and 2019 crashes, the jets were grounded for 20 months due to a design flaw in the autopilot system.
Victims' families oppose the deal
Families of the victims of the crash oppose the request for agreement, calling it not enough. Paul Cassell, who represents many family members, criticized the agreement, saying it fails to acknowledge the gravity of the Boeing actions, which resulted in the deaths of 346 people. The families are requesting a public trial to ensure accountability.
DOJ defends the agreement
The Justice Department claims the penalties are the most serious available, including three years of independent monitoring and increased spending on safety and compliance. The Department of Justice keeps that Boeing will make major expenditures to improve its safety applications.
Effect on Boeing's Reputation
The guilty plea tarnishes Boeing's reputation, which has already suffered from safety issues and past events, such as a door plug inability on an Alaska Airlines flight earlier this year.
Financial and operational consequences
Boeing will pay a doubled criminal fine of $243.6 million and invest $455 million in security and compliance over the following three years. Despite significant financial losses as the crashes, Boeing has avoided losing government contracts, that account for 37% of its 2023 revenues.
Future Legal Challenges
The DOJ clarified that no individuals are granted immunity under this agreement, allowing for potential future charges against Boeing executives. Furthermore, the DOJ is investigating other incidents, such as the Alaska Airlines door blowout.
Boeing Response and Market Reaction
Boeing confirmed that it reached an agreement with the DOJ. Despite its financial woes, Boeing's stock rose 3% following the announcement, indicating investor relief with the deal's terms.
Inputs from Multiple Agencies
Media from multiple sources
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