A federal judge in the United States rejected Boeing’s plea deal that sought to let the plane maker avoid criminal prosecution over two fatal 737 Max crashes, in a surprise twist that threatens to prolong the company’s recovery from past scandals.
US District Judge Reed O’Connor sided with family members of people killed during the crashes, who urged him to reject the agreement. Mr O’Connor said he opposed the proposed settlement because it would improperly require race to be considered in the hiring of an independent monitor and that his role in making sure Boeing abides by the deal would be minimised.
“These provisions are inappropriate and against the public interest,” Mr O’Connor said in his ruling Thursday.
The Texas judge asked both sides to confer and decide on the next steps, which could include revising the plea agreement to address the concerns raised.
A representative for Boeing did not comment on the ruling.
The decision marks a fresh setback for Boeing’s push to get back on track after a year of crisis that began when a door-sized panel blew off an airborne 737 Max in early January. The near-catastrophe led to revelations of poor quality controls inside Boeing’s factories, increased scrutiny from regulators and customers and a management shake-up that included the ouster of the company’s chief executive officer.
Boeing shares fell 1 per on Thursday. The stock has dropped about 40 per cent this year, the biggest decline in the Dow Jones Industrial Average.
Family members of crash victims have fought for years to get harsher penalties following the crashes of Lion Air Flight 610 in October 2018 and Ethiopian Airlines Flight 302 in March 2019. Both fatal accidents were linked to a flawed flight control system.
In 2021, Boeing reached an agreement with the US Justice Department to defer prosecution on charges that it deceived regulators about the system. In May, the government said the company violated that agreement and recommended criminal charges, citing Boeing’s failure to live up to its promises.
Boeing then agreed to plead guilty to criminal conspiracy, pay a fine and install an independent corporate monitor. The new deal also required the company to spend at least $455 million to bolster its compliance and safety programs.
In rejecting the proposed settlement, Mr O'Connor cited provisions related to the selection of the independent monitor, including language directing prosecutors to consider diversity, equity and inclusion policies. He also took issue with requirements that the monitor answer to the government, rather than to the court.
“It is fair to say the Government’s attempt to ensure compliance has failed,” Mr Mr O'Connor said.
Separately, Boeing has not yet resumed producing its top-selling 737 MAX aeroplanes following a machinists strike, but plans to begin later this month, the head of the US aviation regulator said on Thursday.
Federal Aviation Adminstration (FAA) boss Mike Whitaker this week met Boeing chief executive Kelly Ortberg and toured Boeing’s 737 plant in Renton, Washington, as it boosts oversight following the strike, which ended on November 4th.
Mr Whitaker said Boeing’s plan is to slowly restart production later this month and he plans another meeting in January as the company ramps up.
“The thing that I was most struck by was we’re four weeks post-strike and they’re still not producing aeroplanes, because they’re focused on their workforce, the training, making sure they have the supply chain sorted out,” Mr Whitaker told Reuters in a wide-ranging interview.
Whitaker capped production at 38 737 MAX planes per month in January after a door panel missing four key bolts flew off an Alaska Airlines 737 MAX 9 during a flight that month, exposing serious safety issues at Boeing.
He declined to say when he thought the FAA would restore Boeing’s ability to produce more than 38 planes per month, but said he would be surprised if it was less than multiple months before they get close to the 38 maximum. – Bloomberg, Reuters
