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Boeing plea deal in 737 Max crashes angers families and tests prosecutors

Boeing’s decision to plead guilty to a felony fraud charge for its role in two plane crashes that killed 346 people marks an effort to open a new chapter after a half-decade of tumult and investigations. But immediate reactions to the deal — unveiled shortly before midnight Sunday — suggests moving on won’t be easy.

Survivors of the victims of the 737 Max airliner crashes in Indonesia and Ethiopia derided the plea agreement as a soft landing for the aerospace behemoth. Echoing a range of other critics, they argued that the deal fails to hold individual executives accountable while allowing Boeing to avoid a legal admission that its engineering and safety blunders caused the deaths.

“They’re not trying to do anything in terms of justice, in terms of change, in terms of accountability,” said Nadia Milleron, whose 24-year-old daughter perished in the Ethiopian Airlines crash in 2019, said of the deal. “They’re trying to move the case along.”

Members of the general public, she said, “don’t realize it’s a slap on the wrist. There’s no meaningful changes in terms of safety.”

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The single count of fraud stems from an admission by the company that two of its employees misled the Federal Aviation Administration about the operation of an automated control system that was implicated in both crashes. The guilty plea follows a Justice Department finding in May that Boeing, by failing to strengthen internal systems to detect and report fraud, violated a 2021 deferred prosecution agreement that allowed it to previously avoid the charge.

Javier de Luis, a lecturer in the aeronautics and astronautics department at MIT who lost his sister, Graziella de Luis y Ponce, 63, in the Ethiopian Airlines crash, said he was pleased Boeing pleaded guilty but said the agreement did not go far enough.

“This is a deal appropriate to a white-collar paper crime where nobody died,” he said. “Boeing’s actions led to the death of 346 people. This deal makes everyone who died a footnote in this.”

Boeing has taken steps in recent months that it says is setting things right: planning a leadership shake-up, imposing corrective actions at its factories and acquiring one of its largest suppliers to gain stronger control over production. During a recent media tour, one of its executives said the giant company was engaged in “introspection” over airliner manufacturing and safety procedures. The company declined to comment Monday.

But some analysts question what it will take to turn the company around, even as it loses ground to its only real competitor, Airbus. The guilty plea is a reminder of how deep-seated some of the company’s problems are, tracing back to the 2010s and exacerbated by a midair blowout of a fuselage door panel aboard an Alaska Airlines flight in January.

Despite its role as key player in the global aviation system and its huge presence in national defense and space exploration, Boeing has found itself with few allies as it stumbled.

Regulators at the FAA have capped the number of jets Boeing can build each month. The company also has run afoul of investigators at the National Transportation Safety Board, who say it has withheld key information critical to its investigation into the door panel blowout.

Senate investigators have kept up a steady drumbeat of disclosures about whistleblower allegations of weak safety oversight and poor workmanship.

“This plea deal cannot be the end of Boeing’s accountability,” Sen. Richard Blumenthal (D-Conn.), chairman of the Permanent Subcommittee on Investigations, said on X. “The need for ongoing aggressive investigative efforts & other action is obvious.”

Given the run of bad news, analysts said Boeing had little choice but to plead guilty to fraud.

“Boeing’s reputation has sunk so low that this makes little difference,” said Nick Cunningham, an aerospace analyst at Agency Partners in London. A trial risked damaging new disclosures, he said, while admitting to a crime can do little to harm the company at this point. A trial also would have been distracting for the CEO the company will install at the end of the year to replace Dave Calhoun, he said.

George Ferguson, an analyst with Bloomberg Intelligence, agreed that the most prudent choice was to settle and move on.

“If you’re Boeing, you want to put this behind you,” he said. “It’s been a really rough six months and a year or more down the road, you don’t want to be talking about this. Instead, you’d like to be talking about your turnaround, and Boeing certainly needs one.”

A key element of the settlement is the appointment of an outside monitor, something demanded by family members who have waged a years-long battle to hold Boeing accountable.

Mihailis Diamantis, a professor at the University of Iowa College of Law, said the selection of a monitor and the powers they are ultimately given will be an important factor in how effective the plea agreement proves to be.

Pleading guilty to a fraud charge could pose obstacles to it continuing to work on federal contracts, but analysts say that it’s unlikely to be barred from government work. The company’s military business is key to the national defense, and it earned 37 percent of its $78 billion in revenue last year from U.S. government contracts.

The outside monitor is “the only available path, because you can’t get rid of Boeing,” Diamantis said. “You also can’t keep Boeing like it is, so what do you do? Your only option is to try to fix Boeing and that’s a really complicated process because it’s a massive company.”

Diamantis said given Boeing’s long-running problems he was “not fully optimistic for the prospects of a monitorship here unless they’re given some really sweeping powers.”

Beyond the plea deal, Ferguson said continued loss of market share to Airbus may be another critical incentive.

“At some point you get to the point where if you don’t get better, you don’t survive,” he said. “Frankly, Boeing is very fortunate to be in a duopoly where their risk of going away is very minimal. Had they been an auto company, things might have been very different right now.”

For its part, Boeing says it is taking steps to prove it is committed to winning back the trust of regulators, its customers and the public, noting that the FAA-mandated safety plan it recently submitted to the agency will be its guide.

At a recent media event at the sprawling Renton, Wash., factory where Boeing assembles 737 Max jets, top company executives outlined steps the aerospace giant has taken to tighten gaps in its manufacturing and quality control systems. It is establishing clear criteria for what work must be completed on an aircraft before it is cleared to move to the next step in the manufacturing process. It is adding training and testing for new employees to make sure they have mastered the necessary skills for their jobs.

“This is our moment to step back and holistically look at [our systems] and be very introspective,” said Elizabeth Lund, senior vice president overseeing quality control and quality assurance efforts at Boeing. “What else can we do? How can we be certain that our system is as absolutely robust as possible? So we started collecting input from many, many sources. First and foremost, our employees.”

For families, the Justice Department’s decision is another in a long line of disappointments and what they see as staged expressions of sympathy. At a Senate hearing last month, family members stood, holding posters with photos of those who had died as Calhoun, Boeing’s chief executive, entered the hearing room. Calhoun took his seat but before beginning his testimony rose to address the families sitting behind him.

“I would like to apologize on behalf of all our Boeing associates spread throughout the past and present for your losses,” Calhoun told them.

De Luis, who lost his sister, said he did not buy the apology.

“It was clear he had been told by his PR people that he had to do this,” he said. “It just seems all so fake.”

Still, de Luis said their fight is ensuring Boeing takes responsibility for the products it builds.

“Boeing has to succeed, but they have to change,” he said. “The country — the world — can’t afford to have Boeing take it for granted that things like safety just happen.”

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