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Boeing 737 Max: "Fraudulent and misleading behavior by employees"
Photo: Seattle Aviation Images / dpa
The disaster surrounding the design errors in the short-haul 737 Max is costing US aviation giant Boeing dearly.
The aircraft manufacturer agreed to fines of more than 2.5 billion dollars to settle criminal proceedings for fraud and conspiracy allegations in connection with the scandal, the US Department of Justice said on Thursday in Washington.
After two crashes with a total of 346 deaths, Boeing was suspected of having brought its best-selling model series 737 Max onto the market in a rush and neglecting safety.
The US judicial authorities are now accusing Boeing, among other things, of having used misleading information to prevent the government from ensuring the safety of public air travel.
"The tragic crashes of Lion Air Flight 610 and Ethiopian Air Flight 302 revealed fraudulent and misleading behavior by employees of one of the world's leading aircraft manufacturers," said David P. Burns of the Department of Justice's criminal justice department.
Boeing's employees put profit above honesty and withheld information from the US aviation authority FAA.
Reminder from CEO Calhoun
Boeing said in a statement that the Justice Department's penalties involve the behavior of two ex-employees.
This would have deliberately misled an FAA committee responsible for pilot training about changes to the control system of the 737 Max called MCAS.
The now closed settlement shows how important Boeing's obligations to the supervisory authorities are, wrote CEO Dave Calhoun in a memo to the workforce.
Both Boeing and the FAA came under heavy criticism in the wake of the accidents in October 2018 and March 2019.
The main cause of the accident is defective Boeing control software, which should have been repaired quickly.
Instead, it took over a year and a half for the FAA to re-admit the unfortunate pilot, who was banned from take-off due to the crashes, in November.
The high penalty should hurt the Boeing Group, which was badly hit by the 737 Max scandal and the corona crisis.
But compared to the immense costs that the debacle over the most important aircraft type of the Airbus rival has already caused, the sum is still relatively manageable.
Investors reacted calmly, Boeing's shares initially only fell slightly after the trading hours.
500 million for the bereaved
The 737-Max crisis has already put Boeing under massive financial pressure.
Numerous orders were canceled and Boeing incurred billions in extra costs.
In the three months to the end of September, the fourth quarterly loss in a row was incurred.
The group is reacting to the tight financial situation with drastic cost-cutting measures and wants to reduce its workforce to around 130,000 by the end of 2021.
For comparison: at the beginning of 2020 Boeing still had around 160,000 employees.
Before the punishment by the Justice Department, a committee of inquiry of the US Congress had already expressed severe criticism of Boeing.
"The Max crashes weren't the result of a single failure, technical error, or poorly handled event," the final report said.
"They were the terrible culmination of a series of false technical assumptions by Boeing engineers, a lack of transparency on the part of management and grossly inadequate supervision by the FAA." The report also accused Boeing of a "culture of concealment."
Most of the fines are said to flow to airlines with $ 1.77 billion that were damaged as Boeing customers.
According to the Justice Department, $ 500 million will go to a compensation fund for relatives of crash victims.
On top of that, there was $ 234.6 million imposed on the company by law enforcement agencies as an additional fine.
It remains to be seen whether Boeing is off the hook.
There are also a number of lawsuits against the company because of the 737 Max crashes.
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