Boeing is set to plead guilty in 737 MAX case

MAX fine

Boeing is set to plead guilty to misleading air safety regulators in the lead-up to the two fatal 737 MAX crashes, in which 346 people died, according to a court filing yesterday.

The plea deal includes a second $243.6 million criminal fine, as well as a financial commitment from the company to invest $455 million over the next 3 years to enhance its compliance and safety programs.

This latest proposed fine from the Department of Justice takes the total to the maximum allowed by law (if approved by a judge), but it falls well short of the ~$25 billion that families of the victims had been pushing for last month. It’s also a relatively trivial sum compared to Boeing’s size. When combined, the total fine is $487 million, roughly 0.6% of the company’s total sales last year, or the equivalent of 2.3 days’ worth of revenue.

Pleading guilty would make Boeing a felon, and a criminal record could pose problems for its military contracts, which last year totaled $22.8 billion with the Defense Department. This agreement also only relates to alleged failures preceding the fatal crashes and does not address more recent issues, such as the alarming door blowout on an Alaska Airlines flight earlier this year, which has contributed to a significant drop in Boeing's deliveries compared to its European rival, Airbus.

In an effort to gain better oversight of everything that goes into a Boeing plane, the company recently agreed to acquire Spirit AeroSystems, the supplier of its fuselage for the MAX.