~6 0~p>The company agreed to admit that it provided false data to the Federal Aviation Administration and saved money on pilot training.
Boeing agreed plead guilty to conspiracy to defraud in the two deadly 737 MAX crashes. The plea deal, which still must be approved by a federal judge, calls for the planemaker to pay a $243.6 million fine.
Reuters writes about this.
The company agreed to a deal with the U.S. Justice Department to partially avoid prosecution over two 737 MAX crashes in Indonesia and Ethiopia in late 2018 and early 2019 that killed 346 people. After two deadly crashes in five months, victims' families have called for Boeing to be held accountable.
A guilty plea would likely jeopardize the company's potential chances of winning lucrative government contracts from the Department of Defense and NASA. Nevertheless, such a decision, together with the change of CEO this year, will make it easier for Boeing to try to get out of the crisis and begin a new round of development.
The second condition of the deal is the aircraft maker's commitment to invest at least $455 million over the next three years to strengthen its safety and compliance programs. Compliance with this condition will be monitored by a third-party observer who will report the results to the court annually. In addition, the coming three years will be a probationary period for Boeing, during which the company undertakes not to violate any laws.
The US Department of Justice offered Boeing a plea deal on June 30 and gave the company 7 days to agree or face trial on charges of conspiracy to defraud. The company admits it misrepresented itself to the Federal Aviation Administration (FAA) about expanding a key software feature used on MAX aircraft to operate at low speeds. The new software saved Boeing money by requiring less intensive pilot training.
The Maneuvering Characteristics Augmentation System (MCAS) is a software feature designed to automatically push the aircraft's nose down under certain conditions. It was a defect in this function that caused two fatal plane crashes, after which the FAA grounded the MAX aircraft for 20 months, costing Boeing $20 billion in losses.
The allegations have deepened the crisis that has engulfed Boeing since another incident on an Alaska Airlines flight in January exposed the planemaker's continued safety and quality problems.
The agreement covers only Boeing's actions before the crashes and does not protect the aircraft maker from any other potential investigations or charges related to the January incident or other actions. The agreement also does not protect any company executives, although charges against individuals are unlikely due to the statute of limitations.
Lawyers for relatives of those killed in two crashes in 2018 and 2019 said they intend to oppose the deal.
“The families intend to argue that the plea agreement with Boeing unfairly grants Boeing concessions that other criminal defendants would never receive and prevents Boeing from being held accountable for the deaths of 346 people,” they said in a separate lawsuit.
The fine under the plea deal will be Boeing's second. The company has already paid out $2.5 billion in legal settlements in 2021. The current $243.6 million figure represented money the aircraft maker saved by not introducing full MAX pilot simulator training.
Recall that several countries have suspended the operation of Boeing 737 MAX 9 airliners after part of the fuselage skin came off from the aircraft of this model in the skies over the United States.
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