Boeing Agrees To A $2.5bn Settlement In US Over 737 Max Conspiracy Charges

United States aircraft maker Boeing has agreed to settle criminal charges in the country about it hiding information from safety officials about the designing flaws of its 737 Max planes and has agreed to pay an amount of $2.5bn.

Boeing chose “profit over candour”, the US Justice Department said, which impeded regulatory oversight of the planes which were involved in two deadly crashes in 2018 and 2019 within a span of just 5 months.

Families of the 346 people killed in the two accidents will get about $500m of te settlement amount.

The agreement acknowledged how the firm “fell short, Boeing said.

“I firmly believe that entering into this resolution is the right thing for us to do – a step that appropriately acknowledges how we fell short of our values and expectations. This resolution is a serious reminder to all of us of how critical our obligation of transparency to regulators is, and the consequences that our company can face if any one of us falls short of those expectations,” said Boeing chief executive David Calhoun.

Critical information about the changes made by the company to an automated flight control system, known as MCAS, had been hidden from the regulators by Boeing officials, the Justice Department said. This system was held responsible for boht the two deadly crashes involving the plane.

The decision meant that pilot training manuals lacked information about the system, which overrode pilot commands based on faulty data, forcing the planes to nosedive shortly after take-off.

The DOJ said that Boeing did not co-operate with investigators for six months.

“The tragic crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers,” said Acting Assistant Attorney General David Burns.

“Boeing’s employees chose the path of profit over candour by concealing material information from the FAA concerning the operation of its 737 Max airplane and engaging in an effort to cover up their deception.”

Charges of one count of conspiracy to defraud the US were brought against Boeing under the terms of the agreement. That charge would be dismissed after three years if the company adheres to the terms of the deal.  

The majority of the settlement amount – $1.77bn, will go to the airline customers of the company who were financially impacted by the grounding of the planes following the crashes in March of 2019.

The firm also agreed to pay a penalty of $243.6m.

But the deal on Thursday would not end their pending civil lawsuit against Boeing, said attorneys for the victims of the Ethiopian Airlines crash.

“The allegations in the deferred prosecution agreement are just the tip of the iceberg of Boeing’s wrongdoing — a corporation that pays billions of dollars to avoid criminal liability while stonewalling and fighting the families in court,” said a statement from the group of lawyers representing them.

They added that the FAA “should not have allowed the 737 Max to return to service until all of the airplane’s deficiencies are addressed and it has undergone transparent and independent safety reviews.”

(Adapted from

Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability

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