Boeing agrees to pay over $2.5b in penalties over 737 Max debacle
US aircraft manufacturer Boeing has agreed to pay more than $2.5 billion to settle criminal charges over allegations of fraud and conspiracy over its crisis-ridden 737 Max jet, the US Department of Justice said on Thursday.
Boeing had been suspected of rushing its best-selling 737 Max model series to market and neglecting safety, after two crashes that killed a total of 346 people.
US Justice Department officials now accuse Boeing of using misleading statements to hinder the government’s ability to ensure public air travel safety.
Boeing’s employees put profit ahead of honesty and withheld information from the US Federal Aviation Administration, David P. Burns of the Justice Department’s criminal division said.
Boeing said in a statement that the Justice Department’s penalties were about the conduct of two ex-employees.
They allegedly intentionally misled an FAA panel responsible for pilot training about changes to the 737 Max’s control system, called MCAS.
The settlement now reached shows how important Boeing’s obligations to the regulatory authorities are, Group CEO Dave Calhoun said.
Part of the penalties includes paying $500 million in additional compensation to the families of those lost in the Lion Air and Ethiopian Airlines accidents, Boeing said.
The airliner had been grounded in March 2019, following two major accidents, one in Indonesia in October 2018 and another in Ethiopia in March 2019.
The main cause of the accidents was considered to be faulty control software that directed the jets towards the ground. Pilots were unable to overpower the automatic settings.
The fallout from the accidents led to the jet’s worldwide grounding, the resignation of chief executive Dennis Muilenburg, a criminal probe, and Boeing’s largest financial hit in its 104-year history.