Boeing is set to pay over $1 billion but has managed to avoid charges following two major crashes involving its 737 Max planes, which resulted in the deaths of 346 individuals, as announced by the Justice Department on Friday.
This settlement prevents Boeing from being labeled a convicted felon and from facing significant backlash from grieving families who pressured prosecutors to take action against the aircraft manufacturer.
Two U.S. Senators, along with a lawyer representing the victims’ families, urged the government not to drop the case. However, their request was swiftly denied.
Paul Cassel, an attorney for several families affected by the crashes, criticized the non-prosecution agreement, calling it unprecedented for such severe corporate crimes in U.S. history. He expressed a desire to challenge the agreement in court.
Boeing will also contribute an additional $444.5 million to a fund for the crash victims, alongside a fine of $243.6 million.
The Justice Department plans to finalize a written agreement with Boeing by next weekend, and the aerospace company will no longer face external monitoring oversight.
In total, Boeing will pay more than $1.1 billion, which includes over $455 million aimed at enhancing its compliance, safety, and quality initiatives, as well as fines and compensations for the victims’ families, according to the Justice Department.
Officials stressed that Boeing must continue to improve its compliance and ethics programs and maintain oversight from an independent consultant, claiming this resolution offers the most practical benefits.
Boeing has yet to respond to requests for comments regarding this development.
The company’s inventory saw a slight decline of 0.5% on Friday.
Boeing was scheduled to face trial on June 23 concerning the crashes of Lion Air in October 2018 and an Ethiopian Airlines flight a few months later.
The 737 Max has been grounded globally for nearly two years, leading to substantial reputational damage and a financial loss of nearly $12 billion last year.
Recently, Boeing secured a $20 billion contract with the White House for fighter jet production, but it has faced legal challenges, including a prior settlement with the U.S. government.
In 2021, Boeing agreed to a settlement of $25.1 billion to avert indictment, which included a $243.6 million criminal penalty, a $500 million victims’ fund, and $1.77 billion allocated to airline customers.
The previous settlement was set to expire last year, and just after the deadline, incidents with door panels on an Alaska Airlines 737 raised alarms, compounding existing issues for the company.
Investigations revealed that the aircraft had left Boeing’s factory without properly installed bolts for the door panels.
Federal prosecutors have claimed that Boeing breached the terms of the previous settlement due to deficiencies in its compliance and ethics program in relation to fraud regulations.
Moreover, the government has accused Boeing of concealing crucial information regarding the flight control systems implicated in the deadly crashes.
A former Boeing pilot reportedly instructed the removal of the MCAS flight control system from the aircraft manual, according to a government investigation.
Last July, Boeing had reached another settlement involving a guilty plea to criminal fraud, which entailed a fine of up to $487.2 million. However, this settlement was rejected by a federal judge due to concerns over the Department of Justice’s standards for hiring government monitors to supervise the company.
Families of the victims criticized previous agreements, labeling them as “sweetheart deals.”
