Boeing has reached an agreement with the U.S. government to avoid an embarrassing trial with an uncertain outcome in the criminal case related to the crashes of two 737 MAX 8 jets in 2018 and 2019, which killed 346 people.
“We have reached an agreement in principle on the terms of a resolution with the Department of Justice” (DOJ), the American aircraft manufacturer said in a statement released overnight from Sunday to Monday.
In a progress report filed Sunday with the Texas federal court handling the case, the department confirmed the agreement in principle and promised to submit the final agreement to the judge no later than July 19.
The plea agreement comes after the department ruled in mid-May that the group had violated an earlier agreement over crashes of planes operated by Indonesia’s Lion Air and Ethiopian Airlines.
This so-called deferred prosecution agreement, dated January 7, 2021, required it in particular to improve its compliance and ethics program and provided for a three-year probationary period.
But the group has accumulated, for many months, a series of production and quality problems, and an incident on January 5 on an Alaska Airlines 737 MAX 9 has since led to many legal, political, regulatory and governance repercussions.
One count
In reporting its findings to Texas Judge Reed O’Connor in mid-May, the department pledged to report its decision “no later than July 7” on whether or not to prosecute.
About ten days before that deadline, he had sent a plea offer to Boeing. It concerned the only charge contained in the 2021 deferred prosecution agreement.
According to documents filed late Sunday evening with the court, the company has therefore agreed to plead guilty to having “knowingly […] conspired and agreed with others to commit fraud against the United States” during the 737 MAX certification process.
The victims’ families reacted immediately in a statement, saying they were “very disappointed.”
They then filed a motion to contest the decision and requested a hearing before Judge Reed O’Connor.
This “generous agreement is based on misleading and offensive premises,” according to the request filed by their lawyers.
“The American justice system, which should be an example to the whole world, is in fact showing shameful complacency towards those who prioritise short-term profitability and image over the security of [leurs] “passengers,” lamented Catherine Berthet on Monday, who lost her daughter Camille in the Ethiopian Airlines crash.
” Once again, […] DOJ ignores families by failing to mention in settlement plea deal “none of the victims,” she stressed.
The department stated in its Sunday document that it intends to meet with families soon.
Immunity
Following the two crashes, all 737 MAX aircraft were grounded for 20 months in the United States and around the world. Boeing admitted in April 2019 that its MCAS anti-stall software was partly responsible.
Under the 2021 settlement, Boeing paid $2.5 billion — including a $243.6 million fine — in exchange for immunity for its executives from criminal prosecution.
Only one person, a former Boeing test pilot, was prosecuted in the case. And he was acquitted.
The tentative agreement reached Sunday provides for an additional fine of $243.6 million and a minimum investment of $455 million in “compliance and security programs.”
Boeing, under close scrutiny from the US civil aviation regulator, presented a “comprehensive plan” in late May aimed at returning it to quality.
In addition, an independent monitor appointed by the government for a three-year term — a new probationary period — will be responsible for supervising compliance with these commitments. This has been demanded by the families for years.
According to the agreement, the amount of compensation for the families will be determined by the court and the aircraft manufacturer’s board of directors will have to meet with them.
Columbia University professor John Coffee said an out-of-court settlement has the advantage for both sides of “avoiding a humiliating defeat and being quick.” But in such cases, “the general public often comes out the other side,” he noted in a blog post last week.
In addition to the difficulties arising from a criminal trial, a conviction could also have deprived the aircraft manufacturer of lucrative government and military contracts, which generated a third of its turnover in 2023.
Boeing shares were up 0.58% on the New York Stock Exchange at midday Monday.