NATIONAL NEWS

Boeing Will Pay $2.5 Billion To Settle Charge Over Plane

Jan 7, 2021, 2:43 PM | Updated: 4:44 pm
FILE: The first Boeing 737 MAX 7 aircraft sits on the tarmac outside of the Boeing factory on Febru...
FILE: The first Boeing 737 MAX 7 aircraft sits on the tarmac outside of the Boeing factory on February 5, 2018 in Renton, Washington. (Photo by Stephen Brashear/Getty Images)
(Photo by Stephen Brashear/Getty Images)

(AP) – Boeing will pay $2.5 billion to settle a Justice Department investigation and admit that employees misled regulators about the safety of its 737 Max aircraft, which suffered two deadly crashes shortly after entering airline service.

The government and the company said Thursday that the settlement includes money for the crash victims’ families, airline customers and a fine.

Prosecutors said Boeing employees gave misleading statements and half-truths about safety issues with the plane to the Federal Aviation Administration, then covered up their actions.

“Boeing’s employees chose the path of profit over candor,” said David Burns, acting assistant attorney general for the Justice Department’s criminal division.

Boeing blamed two former pilots who helped determine how much training was needed for the Max. CEO David Calhoun said their conduct doesn’t reflect Boeing employees as a whole or the character of the company.

“This is a substantial settlement of a very serious matter, and I firmly believe that entering into this resolution is the right thing for us to do — a step that appropriately acknowledges how we fell short of our values and expectations,” Calhoun said in a memo to employees.

The government will drop the criminal charge of conspiracy to defraud the U.S. after three years if Boeing follows the terms of the settlement.

The settlement removes uncertainty about criminal charges against the iconic U.S. aircraft maker, which is struggling to put the Max crisis behind it. Boeing still faces lawsuits by the families of passengers who died in the crashes, it has lost more than 1,000 orders for the Max, and its once-stellar reputation for engineering has suffered.

Boeing began working on the Max in 2011 as an answer to a new, more fuel-efficient model from European rival Airbus. Boeing admitted in court filings that two of its technical pilot experts deceived the FAA about a flight-control system called the Maneuvering Characteristics Augmentation System, or MCAS, that could point a plane’s nose down if sensors indicated the plane might be in danger of an aerodynamic stall — that it might fall from the sky.

The system was not part of previous 737 models. MCAS was added because the Max’s larger engines, which are mounted higher and farther forward on the 737’s low-swept wings, gave the plane a tendency to tilt too far nose-up in some conditions.

Boeing downplayed the significance of MCAS and didn’t mention it in airplane manuals. Most pilots didn’t know about it.

The first airlines began flying the 737 Max in mid-2017. On Oct. 29, 2018, a Max operated by Indonesia’s Lion Air plunged into the Java Sea. The FAA let the Max keep flying, and on March 10, 2019, another Max operated by Ethiopian Airlines crashed nearly straight down into a field. In all, 346 people were killed.

On both flights, MCAS was activated by a faulty reading from a single sensor. The system repeatedly pushed the planes’ noses down, and pilots were unable to regain control.

After the planes were grounded worldwide, Boeing changed MCAS so that it always uses two sensors, along with other changes to make the automated system less powerful and easier for pilots to override. The FAA ordered other changes, including the rerouting of some wiring to avoid potential dangerous short-circuiting.

In November, the FAA approved Boeing’s changes, and several carriers including American Airlines have resumed using the planes.

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 while they were grounded, and $500 million into a fund for the families of passengers who were killed in the crashes.

Boeing faces dozens of lawsuits by families who lost relatives in the crashes. Three lawyers pressing cases in the Ethiopian crash said the settlement would not affect their pursuit of compensation.

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.

KSL 5 TV Live

Top Stories

National News

FILE: This 2003 electron microscope image made available by the Centers for Disease Control and Pre...
AMANDA SEITZ, Associated Press

US plans end to mpox public health emergency in January

The federal government plans to end in January the public health emergency it declared earlier this year after an outbreak of mpox left more than 29,000 people across the U.S. infected.
17 hours ago
FILE - This undated artist rending provided by the U.S. Air Force shows a U.S. Air Force graphic of...
TARA COPP Associated Press

Pentagon debuts its new stealth bomber, the B-21 Raider

The United States' newest nuclear stealth bomber is making its public debut after years of secret development. The new bomber is part of the Pentagon's answer to rising concerns over a future conflict with China.
17 hours ago
FILE: LONDON, ENGLAND - AUGUST 03:  The Airbnb logo is displayed on a computer screen on August 3, ...
Shay O'Connor

Families of tourists found dead in Mexico Airbnb plan to file lawsuit

A news conference was held Thursday with the mothers who lost their children last month in Mexico to carbon monoxide poisoning at an Airbnb.
17 hours ago
F.B.I. Director Christopher Wray speaks at a press conference at the U.S. Department of Justice on ...
ERIC TUCKER, Associated Press

FBI director raises national security concerns about TikTok

FBI Director Chris Wray is raising national security concerns about TikTok, warning Friday that control of the popular video sharing app is in the hands of a Chinese government “that doesn't share our values.”
17 hours ago
Flyer for killings of University of Idaho students...
REBECCA BOONE Associated Press

EXPLAINER: Deaths of 4 Idaho students fuel online sleuths

The deaths of four University of Idaho students nearly three weeks ago has riled up thousands of would-be armchair sleuths, many of whom are posting speculation and unfounded rumors about the fatal stabbings online.
17 hours ago
A hiring sign is displayed in a window of a store in Manhattan on December 02, 2022 in New York Cit...
Paul Wiseman, AP Economics Writer

EXPLAINER: 5 key takeaways from the November jobs report

For nearly nine months, the Federal Reserve has relentlessly raised interest rates to try to slow the U.S. job market and bring inflation under control.
17 hours ago

Sponsored Articles

house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 reasons you may want to consider apartment life over owning a home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to choose what MBA program is right for you: Take this quiz before you apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Diverse Group of Energetic Professionals Team Meeting in Modern Office: Brainstorming IT Programmer...
Les Olson

Don’t let a ransomware attack get you down | Protect your workplace today with cyber insurance

Business owners and operators should be on guard to protect their workplace. Cyber insurance can protect you from online attacks.
Hand turning a thermostat knob to increase savings by decreasing energy consumption. Composite imag...
Lighting Design

5 Lighting Tips to Save Energy and Money in Your Home

Advances in lighting technology make it easier to use smart features to cut costs. Read for tips to save energy by using different lighting strategies in your home.
Portrait of smiling practitioner with multi-ethnic senior people...
Summit Vista

How retirement communities help with healthy aging

There are many benefits that retirement communities contribute to healthy aging. Learn more about how it can enhance your life, or the life of your loved ones.
Boeing Will Pay $2.5 Billion To Settle Charge Over Plane