Key Takeaways
- Boeing has agreed to a guilty plea over the 737 Max crashes in 2018 and 2019 that killed more than 300 people, the Justice Department said in a Sunday night court filing.
- The airplane maker will pay another $243.6 million in fines, and be required to spend about $455 million on its safety and compliance programs over the next three years.
- The company also faces a three-year probationary period where it will be monitored by a government-appointed compliance monitor.
Boeing (BA) has agreed to plead guilty to a charge of defrauding the federal government over the 2018 and 2019 crashes of a pair of 737 Max planes that killed more than 300 people, the Justice Department said in a Sunday night court filing.
The sides are working to finalize terms of the plea agreement, and asked the judge to postpone scheduling a trial as they expect to make the deal public by filing it with the court by July 19, according to the document filed in the Northern District Court of Texas.
Boeing To Plead Guilty, Pay $243.6M Fine, Receive Probation
The guilty plea will replace Boeing’s previous settlement with the federal government, a deferred prosecution agreement that said the company would avoid criminal prosecution if it maintained certain safety standards.
The government found that the company violated the agreement amid a number of investigations into Boeing’s safety and production practices this year following a January incident in which a door plug detached in midair.
Prosecutors presented their findings to Boeing last month, and the sides started to work on a guilty plea rather than take the case to trial. Families of the crash victims have opposed the deal, the DOJ said in the filing, and advocated for prosecuting Boeing for the maximum possible penalties.
Terms of the Plea Deal
Under the deal outlined Sunday, Boeing will plead guilty to one charge of conspiracy to defraud the United States, pay another $243.6 million fine, along with restitution payments to the families of the crash victims, with exact dollar amounts determined by the court. The restitution payments will not impact the families’ ability to pursue civil suits against Boeing, as some of the lawsuits against Boeing are still pending while many others have been settled.
An independent compliance monitor will be appointed who will oversee Boeing’s probation for three years, providing updates to the court and the DOJ, along with an annual report made public through the court docket.
Boeing’s board members will also meet with families of the victims, some of which were in attendance when Chief Executive Officer (CEO) David Calhoun testified before Congress last month. The company will also be required to spend about $455 million over the course of its probation on improving its compliance and safety practices.
Boeing shares rose nearly 1% to $186.21 an hour before the opening bell Monday, but are still down nearly 30% since the start of the year.