Boeing to Plead Guilty to Criminal Fraud Conspiracy Charge

Boeing has agreed to plead guilty to a criminal fraud conspiracy charge and pay a fine of $243.6 million to resolve a U.S. Justice Department investigation into two fatal 737 MAX crashes.

This agreement follows the crashes in Indonesia and Ethiopia in 2018 and 2019, which resulted in the deaths of 346 people.

Impact and Conditions of the Plea Deal:

The plea deal, which requires judicial approval, would brand Boeing as a convicted felon. This could jeopardize Boeing’s ability to secure lucrative government contracts with entities like the U.S. Defense Department and NASA, though the company may seek waivers to mitigate this risk.

In addition to the fine, Boeing has committed to spending at least $455 million over the next three years to enhance its safety and compliance programs. The deal also mandates that Boeing’s board meet with the families of those killed in the crashes.

An independent monitor will be appointed to oversee Boeing’s compliance, with annual progress reports made public, and the company will be on probation during the monitor’s three-year term.

Reaction from Victims’ Families:

The settlement has been met with strong criticism from the families of the victims, who have called for a trial and harsher financial penalties.

Lawyers representing some of the victims’ families plan to urge Judge Reed O’Connor to reject the deal. They argue that Boeing’s actions leading to the crashes constitute one of the deadliest corporate crimes in U.S. history.

Broader Implications for Boeing:

This plea deal is part of a broader crisis for Boeing, facing ongoing scrutiny for safety and quality issues. A separate in-flight blowout in January highlighted continuing problems at the company. The plea agreement spares Boeing a potentially contentious trial that could have further exposed its decision-making processes before the crashes.

The timing of this plea deal comes as Boeing prepares for significant changes, including the appointment of a new CEO later this year and its planned acquisition of Spirit AeroSystems.

A Boeing spokesperson confirmed that the company had “reached an agreement in principle on terms of a resolution with the Justice Department.”