Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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- Boeing faces three labor contracts expiring this year March 10, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 12. March 7, 2025
New Boeing plea deal filed with court
By Scott Hamilton
July 25, 2024, © Leeham News: The new, second plea agreement between Boeing and the US Department of Justice (DOJ) has been filed with the US federal court in Northern Texas. Boeing agreed to plead guilty to criminal charges. The DOJ proposes a criminal penalty of $243.6m and requires Boeing to spend $455m on internal safety protocols.
The criminal penalty matches the amount in the first plea agreement of January 2021. Under the terms of that agreement, Boeing had three years to shape up, or the DOJ could pursue criminal charges. The three-year monitoring period was due to expire two days after the Jan. 5, 2024, door plug blowout of an Alaska Airlines Boeing 737-9 MAX on climb out from the Portland (OR) airport. This incident occurred at 16,000 ft. Nobody died but there were minor injuries.
The airplane was damaged throughout the cabin and into the cockpit with the sudden depressurization. Boeing bought the airplane back from the airline.
The 2021 fine and the proposed current fine have been roundly criticized as inadequate.
Criminal fine maximum allowed by law
In the court filing, the DOJ says the fine is the maximum amount under federal sentencing guidelines. The current $243.6m, spread over the pre-Farnborough Air Show backlog of 4,173 solid 737 orders in backlog, is $58,000 per airplane.
But the DOJ says the requirement to spend $455m in safety protocols is, on an annualized basis, 75% more than Boeing spent on compliance in 2024.
The new, 83-page Deferred Prosecution Agreement lays out a damning history at Boeing leading to this new DPA. The agreement may be downloaded here: 7-24-24 Boeing Plea Agreement.
So, another DPA, and another wrist-slap. I wonder how the families of the 346 victims of the two all-fatalities MaxCrashes are feeling right now.
Not deferred like before .
Its a plea of guilty to actual charges- the penalty has yet to be confirmed by the judge of course. The deal is just that the prosecution agrees with it.
This is how the vast majority US federal criminal charges of all kinds play out
Do try to keep up
[cough.]
Glad- as always- that you’re around, DoU.
“negotiated judgements”
And it is a major subversion of the legal system.
That one seems to be claiming that because “this is how it works” here in USbekistan, that it’s ok, and even good.
It’s not working- except for a tiny and getting tinier few- so I humbly disagree with my good friend Duke.
Really.
Airbus had a deal in France with the prosecution over the Air France crash.
An Appeals court overturned the deal and it went to trial
Airbus was found guilty of corporate manslaughter but not criminal manslaughter
They were negligent over the faulty airspeed indicators and how the crew was unaware when FBW envelope protection is on or off
You are creating fiction, again.
Stop it.
Sept. 2019 : french judges reject the case brought up by the state attorney.
Mai 2021 : french appeals court accepts the case and finds “Negligent homicide”
April 2023 : french court squashed the 2021 judgement.
This is another sweetheart deal for Boeing. The fine is $243m, which is lunch money for a company this size. The guilty plea will have zero practical effect, as we all know that Boeing will receive waivers to continue working for the DOD. The most palpable effect of this deal is the shame to the company of being a confessed felon. However, it has been shown that the Calhoun aristocracy running the show has no shame in the conventional sense. The only way to influence their behavior is with $$$, and the nonetary cost of this plea deal will likely be negligible.
It would have been better if the plea deal required Calhoun and half the board to leave, but I’m really just paraphrasing Aboulafia here.
Basically, if you want to high quality views on these kinds of issues, read Aboulafia and Hamilton, Ron Epstein is good too. These are aviation industry analysts. The “Wall Street Analysts” are know-nothing punks who just eat up the latest Calhoun fantasy about $10b in cash flow.
Calhoun and his cash flow looks like a less sympathetic modern Sisyphus and his giant rock.
Well well well. The new Disney movie plot is out. The ogres are up to no good again. Will the teenage princess sing and dance their way across the skies. Merch to follow
https://www.politico.com/news/2024/07/03/boeing-doj-lawsuit-decision-00166532
Read what Richard Aboulafia says here about the plea deal. You really think you know better than him? I don’t think you do.
Yes, more business as usual at that TBTF outfit. Even another major crash would have no effect on them, I think. ‘Prosecution Theatre’ is my term du jour- as with so many things in
This Great Nation™.
It’s not good for 99.99% of us when our FriendlyCorps™ effectively own .gov
“Boeing Sued by Pension Fund Seeking 737 Max Safety Records”
“A pension fund sued Boeing Co. seeking information about the company’s safety-related policies and practices on Friday, days after the aerospace giant pleaded guilty to criminal charges stemming from two fatal jetliner crashes.
“The investor lawsuit, which is under seal, requests internal documents including board minutes and whistleblower complaints dating back to early 2022, according to supplemental court papers filed publicly. The filing refers specifically to a January blowout in a Boeing 737 Max 9 door component that forced an Alaska Airlines Inc. flight to make an emergency landing.
“Boeing declined to comment through a spokesperson Friday.”
https://news.bloomberglaw.com/esg/boeing-hit-with-pension-fund-suit-seeking-737-max-safety-records
So BA gets tagged with criminal charges- who gets punished ? mainly the shareholders.
Possibly some mid level manager/supervisor.
BA puts profit over safety for over two decades is not exactly new news- up there with the sun comes up in the east discovery cus the earth is round.
Quality escapes on post it notes didn’t kill anyone.