Boeing to plead guilty to criminal fraud charge

World

Boeing has agreed to plead guilty to criminal fraud tied to the fatal 737 Max crashes, a decision that brands the U.S. aerospace giant a felon but allows it to avoid trial while it tries to turn the page from safety and manufacturing crises.

Under the deal, Boeing would face a fine of up to $487.2 million, though the Justice Department recommended that the court credit Boeing with half that amount it paid under a previous agreement, resulting in a fine of $243.6 million. The plea deal requires the approval of a federal judge to take effect.

If the deal is accepted, it could complicate Boeing’s ability to sell products to the U.S. government as a felon, though the company could seek waivers. About 32% of Boeing’s nearly $78 billion in revenue last year came from its defense, space and security unit.

A Defense Department official said Monday the DOD would assess Boeing’s remediation plans and its agreement with the Justice Department “to make a determination as to what steps are necessary and appropriate to protect the Federal Government.”

The plea deal also installs an independent monitor to oversee compliance at Boeing for three years during a probationary period. Boeing would also have to invest at least $455 million in compliance and safety programs, according to a court filing.

Boeing also agreed for its board of directors to meet with crash victims’ family members.

The Justice Department unveiled the deal late Sunday, months after U.S. prosecutors said the aerospace giant violated a 2021 settlement that shielded it from prosecution for three years.

The plea deal offer forced Boeing to decide between a guilty plea and the attached terms, or going to trial, just as the company was seeking to turn a corner in its manufacturing and safety crises, pick a new CEO and acquire its fuselage maker, Spirit AeroSystems.