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Boeing to pay 2.5bn dollars over 737 Max conspiracy

Boeing to pay 2.5bn dollars over 737 Max conspiracy”

"The misleading statements, half-truths, and omissions communicated by Boeing employees to the FAA impeded the government's ability to ensure the safety of the flying public", said U.S. Attorney Erin Nealy Cox for the Northern District of Texas.

"Boeing's employees chose the path of profit over candor by concealing material information from the FAA [Federal Aviation Administration] concerning the operation of its 737 Max airplane and engaging in an effort to cover up their deception".

"This settlement is protection for Boeing rather than justice, as it is a continuation of Boeing evading accountability and transparency", said Michael Stumo, whose daughter died in the MAX crash in Ethiopia. While Boeing had to agree to enhance reporting on its internal controls and meet routinely with regulators to prove it's doing all it can to discourage future violations of US fraud laws at the company, the DOJ will not require an independent compliance monitor, in part because "the misconduct was neither pervasive across the organization, nor undertaken by a large number of employees, nor facilitated by senior management".

The 737 Max returned to the skies last month following two deadly crashes and a almost two-year grounding.

While Boeing agreed to the settlement, it will not be forced to plead guilty to the criminal charges.

Reuters has reported that Boeing managers told engineers working on the Max, including the MCAS, that their designs could not trigger more comprehensive training designations from the FAA.

The DoJ said Boeing had admitted in court documents that two former 737 MAX technical pilots deceived the FAA's Aircraft Evaluation Group (AEG) about the controversial Maneuvering Characteristics Augmentation System (MCAS) flight control software involved in the two crashes.

The deferred prosecution agreement discussed Boeing's financial incentive to secure training that would not require additional pilot simulator time, which could have deterred airlines from buying the plane.

More news: Unemployment Claims at 787K Last Week

But by singling out those two Boeing employees accused of deceiving FAA regulators, critics say the Justice Department is letting Boeing off the hook. Last week, American Airlines flew a Boeing 737 Max from Miami to NY with paying passengers on board, making the first commercial flight after worldwide grounding of the troubled aircraft. The Federal Aviation Administration let the Max keep flying, and on March 10, 2019, another Max operated by Ethiopian Airlines crashed almost straight down into a field. Following the Ethiopian Airlines crash, the FAA learned that the part activated during the flight and may have played a role in the crash.

The agreement also cited remedial steps Boeing had taken since the crashes, such as firing its previous chief executive in late 2019 and adding a permanent safety committee at the board level.

In both crashes, incorrect data from a faulty sensor caused the MCAS to misfire, forcing the planes to nose down repeatedly.

The software was created to push the nose of the plane downward if it stalled.

The 737 Max planes were grounded for 20 months following the March 2019 crash and recently started taking off again. The FAA also ordered other changes, including the rerouting of some wiring to avoid potential risky short-circuiting.

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

The massive multinational corporation was charged with conspiracy to defraud the United States over making misleading statements to authorities about the safety of its 737 MAX aeroplane.

Those crashes led the FAA and other regulators to ground hundreds of 737 MAX planes operated by airlines around the world.



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