Boeing paying $2.5B on MAX-safety rap

Boeing will pay $2.5 billion to settle a criminal-conspiracy charge for misleading regulators about the safety of its 737 MAX aircraft, which suffered two deadly crashes shortly after entering airline service.

The Justice Department said Thursday that Boeing agreed to the settlement, which includes money for crash victims’ families, airline customers and a criminal fine.

Prosecutors said Boeing employees concealed important information about the plane from the Federal Aviation Administration, then covered up their actions.

“The misleading statements, halftruths and omissions communicated by Boeing employees to the FAA impeded the government’s ability to ensure the safety of the flying public,” said Erin Nealy Cox, the US attorney in Dallas.

Boeing CEO David Calhoun said settling the charge “is the right thing for us to do — a step that appropriately acknowledges how we fell short of our values and expectations.” He said it would remind Boeing employees to be transparent with regulators.

The government will drop the criminal charge after three years if Boeing follows the settlement terms.

Under the settlement announced Thursday, Boeing will pay a $243.6 million fine, $1.77 billion in compensation to airlines that were unable to use their MAX jets that were grounded, and $500 million into a fund for the families of 346 people killed in the crashes.

Boeing said in a regulatory filing that it will take a $743.6 million charge against earnings because of the settlement.

The crashes and grounding of the MAX, Boeing’s best-selling plane, has plunged the Chicago-based company into its deepest crisis. It has led to billions in losses and resulted in the ouster of former CEO Dennis Muilenburg in December 2019.