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Boeing will pay $2.5 billion to settle charge over 737 Max crashes

Boeing, which will admit that employees misled regulators, still faces lawsuits by the families of passengers who died in crashes.
Image: Rescuers work the scene of the Ethiopian Airlines crash near Addis Ababa on March 11, 2019.
Rescuers work the scene of the Ethiopian Airlines crash near Addis Ababa on March 11, 2019.Mulugeta Ayene / AP file
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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 deferred prosecution agreement includes money for the crash victims’ families, airline customers and a fine. The government will drop a criminal charge of conspiracy to defraud the U.S. after three years if Boeing follows the terms of the settlement.

In Indonesia, the brother of two victims of the first Max 8 crash, Muhammad Rafi Ardian, 24, and Rian Ariandi, 24, said he hoped the case would be settled soon and that there would be no more crashes.

The two were among 189 who died on Oct. 29, 2018, when a Max operated by Indonesia’s Lion Air plunged into the Java Sea.

"We are entering the third year now. So, it can lighten the psychological burden of the family after the legal process in the U.S. is finished, too," said Anton Sahadi.

“The prolonged mediation process was traumatizing,” he said.

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.

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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.