Boeing agrees to pay $2.5B fine to settle federal criminal charges

While engineers work to clear hundreds of 737-Max airliners to fly again, Boeing agreed Thursday to pay $2.5 billion to settle charges of “covering up deception” and “criminal misconduct” involving the process of certifying the 737 Max with the FAA.

The Department of Justice said Boeing intentionally defrauded the FAA by supplying false information about the MAX’s flight control system, branded the Maneuvering Characteristics Augmentation System (MCAS).

Prosecutors say that misinformation led to pilots not being trained properly, and to two crashes, killing 346 people.

Aviation expert Scott Hamilton said the settlement will not hurt Boeing’s bottom line. “That’s pocket change to Boeing,” Hamilton said, pointing out that only $243.6 million is an actual fine for criminal misconduct, which is less than 10% of the total amount.

70% will be paid to compensate airlines flying the 737 Max for the aircraft’s 20-month grounding. Hamilton says the crisis comes from a culture of Boeing valuing profits over engineering.

“It’s cutting costs, cutting costs, cutting costs, and I think that culture is really the root of what happened here, and that goes straight to Chicago and the board of directors.”

Hamilton believes a stronger message would be sent if executives were fired.

“Half of the board of directors who were there at the creation of the Max in 2009, they’re all still there,” he said. “Why aren’t they gone?”

Hamilton said he’s concerned fines instead of firings could mean the cost-cutting culture continues.

“Until they’re gone, this continues to be a good old boys club, and oh, by the way, the current CEO David Calhoun was there in 2009. He was named to the board in 2009. He should be gone.”

But Hamilton believes because of intense FAA scrutiny over 20 months, passengers should have every confidence the Max is very safe to fly.

The process of recertifying airworthiness has to be done with each of the 450 737 Max aircraft currently in operation with design changes, software updates and more pilot training.

Hundreds of the aircraft are currently in storage in Renton and have not yet been delivered.

Cox Media Group