Boeing Agrees to Plead Guilty in 737 Max Crash Case, but Families of Victims Remain Skeptical
Boeing’s recent agreement to plead guilty to a federal criminal charge in relation to the two fatal crashes of its 737 Max aircraft in 2018 and 2019 marks a significant turning point in the long-running crisis surrounding the company. While the plea deal aims to resolve the Justice Department’s investigation, it faces legal and ethical challenges, particularly from families of the crash victims who remain unconvinced of its adequacy.
Key Takeaways:
- Boeing Pled Guilty to Fraud: As part of the agreement, Boeing will plead guilty to conspiring to defraud the federal government and face a $487.2 million fine, along with three years of probation and an independent monitor.
- Families Express Discontent: Families of the crash victims remain skeptical, arguing that the plea deal fails to hold Boeing accountable for the deaths of 346 people. They assert the deal is inadequate and seek a larger fine and more severe consequences.
- Focus on Independent Monitor: A key feature of the agreement is the appointment of an independent monitor to oversee the company’s compliance with safety measures and report their findings to the government. The scope of the monitor’s authority and the selection process remain subject to further scrutiny.
- Impact on Government Contracts: Boeing’s guilty plea could jeopardize its lucrative government contracts, forcing it to navigate potential disruptions in its defense and space business, which represents over a third of its revenue.
- Unresolved Questions: The deal does not address the separate investigation into a January incident where a panel blew off a Boeing 737 Max jet during an Alaska Airlines flight, prompting the FBI to investigate potential further complications for the company.
Families Reiterate Dissatisfaction with Deal
Many families of the victims are deeply disappointed with the deal, claiming that although Boeing is pleading guilty, neither the company nor its executives face any individual accountability for the tragic losses. Erin Applebaum, a lawyer representing 34 families who lost loved ones in the Ethiopian crash, stated: "We don’t think that it properly addresses the root cause of the problems at Boeing."
Applebaum believes that meaningful change at Boeing can only be achieved through actions that directly impact its financial standing, highlighting the need for stricter penalties and larger fines. She also criticizes the public input on the selection of the independent monitor, deeming it “nothing but lip service” due to the ultimate decision residing with the Justice Department.
Families are currently striving to persuade the judge to reject the plea deal, arguing that it will not adequately enhance public safety. Concurrently, several civil lawsuits filed against Boeing by affected families are scheduled to begin trials later in the year.
The Role of the Independent Monitor
The independent monitor, appointed by the Justice Department within the framework of Boeing’s probation period, will hold the authority of a probation officer and be tasked with ensuring the company’s adherence to safety measures. This will involve submitting annual reports to the government and potentially recommending changes to Boeing’s production process or quality control.
John C. Coffee, a law professor specializing in corporate governance at Columbia University, highlights the potential for sensitivity surrounding the monitor’s role: "Nobody wants a free-roving monitor looking at their files." The monitor’s authority will depend on the final details of the plea agreement, such as their reporting channels and whether they can impose penalties.
Veronica Root Martinez, a law professor at Duke University specializing in corporate misconduct and compliance, suggests that the monitor’s actions will likely undergo court oversight given the guilty plea and public filings. They will likely work closely with company insiders to develop recommendations and oversee compliance with the plea deal.
Potential Implications for Boeing’s Future and Government Contracts
The guilty plea presents a distinct challenge for Boeing, potentially jeopardizing its lucrative government contracts. Companies convicted of certain felonies typically require waivers for future government contracts, and Boeing is in discussions with the Pentagon about the potential impact of the plea on their current contracts.
Loren Thompson, a long-time aerospace analyst, emphasizes that potential disruption to Boeing’s defense and space business, which contributes over a third of its revenue, could have significant ramifications. He points out that as other manufacturers have gained prominence over time, Boeing’s defense business has declined significantly.
"Any further impediment to booking new defense business will be very detrimental to the company’s portfolio of products," Thompson concludes.
Uncertainties Persist Beyond the Plea Deal
The plea deal does not offer any immediate resolution to the separate investigation into the January incident involving a Boeing 737 Max jet during an Alaska Airlines flight. The FBI, currently investigating the incident, has declined to comment on the potential implications of the plea deal.
The deal’s impact on future regulatory approvals and potential lawsuits remains unclear, raising questions about the overall impact of the agreement on Boeing’s recovery from the 737 Max crisis and its future in the aviation industry.
