Boeing Will Plead Guilty To Fraud Related To Fatal 737 Max Crashes (cnbc.com) 86
Boeing agreed on Sunday to plead guilty to conspiring to defraud the government in a case linked to crashes of its 737 Max jets in Indonesia and Ethiopia that killed 346 people -- a stunning turn for the aerospace giant after the Justice Department determined that Boeing failed to live up to terms of a 2021 deal to avoid prosecution. Washington Post adds: Prosecutors alleged that two Boeing pilots concealed key information from the Federal Aviation Administration about a new automated control system on the Max. The system was implicated in both crashes, causing uncontrollable dives. By agreeing to plead guilty to the single felony count just before a midnight deadline Sunday, the company will avoid going to trial in the high-profile case.
The Justice Department filed documents related to the deal in federal court in Texas late Sunday night, setting up a planned hearing where family members -- who have criticized the pending agreement -- will be permitted to speak out. The court subsequently must decide whether to accept the plea agreement. Boeing had already agreed to $2.5 billion in penalties and payouts in 2021. As part of the new deal, the company will pay an additional $487.2 million in penalties, agree to oversight by an independent monitor, spend at least $455 million to strengthen compliance and safety programs and be placed on supervised probation for roughly three years, according to a Justice Department official. The agreement also included one thing crash victims' families long sought: a meeting with Boeing's board of directors.
The Justice Department filed documents related to the deal in federal court in Texas late Sunday night, setting up a planned hearing where family members -- who have criticized the pending agreement -- will be permitted to speak out. The court subsequently must decide whether to accept the plea agreement. Boeing had already agreed to $2.5 billion in penalties and payouts in 2021. As part of the new deal, the company will pay an additional $487.2 million in penalties, agree to oversight by an independent monitor, spend at least $455 million to strengthen compliance and safety programs and be placed on supervised probation for roughly three years, according to a Justice Department official. The agreement also included one thing crash victims' families long sought: a meeting with Boeing's board of directors.
One word (Score:5)
Re:One word (Score:5, Insightful)
Like in the vast majority of cases, the people who were responsible for such outcomes can be outlined.
VPs, Board of Directors, CxOs, whoever's signature was on documents which underlined those decisions.
That's, in theory, the justice system's job, to find them and punish them.
Re: (Score:2)
Everyone C__ level with an MBA.
Re:One word (Score:5, Interesting)
Re:One word (Score:5, Insightful)
Re: (Score:2)
Your idea seems intriguing until you realize that corporations have endless re-spawns.
Yep, it's called pheonixing.
The problem with a corporation like Boeing is that they do have an essential role, in the military, in air transport... There are thousands of Boeing products still flying and still will be after the 737-Max has been grounded again, these products still need to be supported and this is to say nothing about demand.
Ultimately, its a small number of people who benefit from corporate malfeasance, so it's these people who need to be punished, up to and including jail if found gu
Re: (Score:3)
But if they're convicted of a felony, aren't they prohibited from being granted government contracts?
Re: (Score:2)
If they try to enforce that law you'll see some accounting highjinks to make Boeing the subsidiary of some shell company or some such foolishness. Too many disgustingly rich people are too deeply invested in Boeing to allow anything like rules or laws get in the way of their money.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Your idea seems intriguing until you realize that corporations have endless re-spawns.
Yes, but it will respawn with empty inventory. When you "kill" a company, of course you are going to seize all of its assets, right ?!
Re: (Score:2)
The only reason why this is the case is because the government allows it. The only reason why corporations are legal is because people recognize them as a net positive benefit to society. If they become a net negative... well, there go your evil overlord privileges.
Re: (Score:3)
In Japan they can order "jail" for corporations, where they have to shut down for a number of days and are not allowed to do any business during that time. There are exceptions for stuff like maintenance of equipment that cannot be postponed. AIUI they have to keep paying wages during the down time.
The main issue with any of these ideas is that it could really screw Boeings innocent customers as well. They need parts and on-going support from Boeing to keep operating their fleets. For that reason it may be
Re: (Score:2)
I want to agree, but I don't see how you can kill Boeing wihout kicking a leg out from under the American economy as a whole.
Boeing has 170k employees, and 11,000 suppliers with an uncountable number of employees.
Southwest, United, American, and Alaska Air have significant numbers of Boeing aircraft that require manufacturer support. They employ 74k, 84k, 132k, and 26k people respectively.
It's a low Spitball estimate that half a million people would be unemployed from just first order effects if you killed
Re: (Score:3)
Re: (Score:1)
If our country was functional at the moment, we'd nationalize them, get their house in order, and then spin them back out in like 20 years. With standing rules that none of the employees Director and above can ever work for the business or industry again.
Re: (Score:2)
Most executives receive a substantial portion of their compensation in the form of stock options. All shareholder definitionally hold stock in a company. If the company is liquidated, then all those stock owners will receive a one-time windfall payment from the sale. Meanwhile, all of the workers and the communities they live in will suffer great deprivation. If the company is a major player in any critical infrastructure, then everyone suffers. Except for the owners. That's what's known as a perverse incen
Re:One word (Score:5, Insightful)
I'd start with the person responsible for safety certification. Then I'd go to the CEO (not the current guy, the CEO at the time the 737 MAX was under development.) Also the executive in charge of the 737 MAX program, and probably the Chief Engineer.
What's clear to me is Boeing botched the safety program, cutting corners. The changes that slipped in SHOULD HAVE caused a redo of the hazard analysis and verification against those revised hazards (e.g. "the part that failed causing the MCAS system to malfunction".) Yes, that would have been a schedule slip and a cost hit.
When the company pleads guilty, the stockholders pay. And the executives who caused this get their retirement pay. That's just wrong.
Re: (Score:3)
Most corporate executives are psychopaths, studies have shown that. To get to those levels of corporate culture you pretty much need to be a psychopath, a normal person doesn't have the ruthless self-centeredness necessary. There's no "rehabilitating" those people, it's best to lock they away where they can't do any more damage.
Besides, they've already hidden a large portion of their assets.
Re: (Score:2)
They didn't "botch" their safety program, they deliberately disassembled it. There were actual documented procedures of how to avoid mandated legally-required checks. This started about the turn of the century, so while the guy in charge of the 737 MAX development is very much to blame for its issues he was just following the well established corporate ethos.
Re: (Score:2)
There are many fine, upstanding individuals who would never dream of so much as stealing a donut, but who will do whatever is necessary
Re: (Score:2)
The safety supervisor has a moral, if not formal legal responsibility (like Designated Engineering Representatives have/had) to ensure the hazard analysis is complete. A change to the configuration should have resulted in a revision to the hazard analysis, and in particular identifying that the one sensor could cause the plane to misbehave. More than 1 sensor should have been required, along with other mitigations.
I learned aviation safety before the changes that happened just before the 737 MAX program.
Re: (Score:2)
Re: (Score:2)
Re: One word (Score:2)
Re: (Score:1)
Re: (Score:3)
Fines to dodgy executives are just another business costs. A cost that they're never going to have to pay. Wave a few months in a minimum security prison under their noses and suddenly they become very eager to comply with safety standards. Corporate malpractice needs to be a jailable offense.
Re: (Score:2)
Yep, that would be right and it would be _just_. Not going top happen though.
Re: (Score:2)
Re: (Score:2)
Easy to say, hard to do.
If you try the individuals alone - they'll point fingers at the others, probably enough to ensure reasonable doubt prevents conviction. You're not going toe easily flip one of them either. Boeing can put a lot of money behind their defense, so none off them are going to be desperate enough.
Re: (Score:2)
Seems logical. (Score:3)
Not gonna change a single thing (Score:4, Interesting)
This settlement is a joke. Same fone amount they already paid 3 years ago. And it did nothing. No reason it's going to be any different. Doing the same thing over again and expecting different results is insanity.
TDK (Score:5, Interesting)
At the end of the documentary, there is a scene were the executives publicly apologize. Old Japanese people, bending deep, in a long silence. It had to hurt standing there so long. TDK took responsibility. Amongst others, they actively chased down the units with the possible defects.
They did not deny anything. They did not downplay the issue. They did not hide behind lawyers. They did not play the blame game. They made sure that everyone in the company knows that quality is important. At the end we all got information with proper channels to report quality issues at different levels. All info for doing a whistle blower was there.
Boeing, taking notes?
Re:TDK (Score:5, Interesting)
Seriously, this wouldn't work in US corporation because in Japan, that admission of guilt is part of the process of making a better company.
In US it's an end of the process of seeking of guilty, and moving to determining punishment. It's a completely different culture, with completely different outcomes for the same action. In Japan, that allows company to move forward. In US, it allows various PR professionals to earn a living by ensuring that company will have far more trouble moving forward than it would if it admitted as little as possible.
Remember when Toyoda tried to do Japanese apology after Toyota had a problem with floor mats (if I remember correctly)? Americans made it into a ritual humiliation circus because they had no idea how to handle CEO making a public apology like the one you describe. It went all the way up to Congress hearings. Japanese were shocked at this treatment, and rumor was that Toyoda swore to never do this again in US.
Re: TDK (Score:2)
Re: TDK (Score:4, Insightful)
It has nothing to do with Boeing execs. It has everything to do with culture within the nation as a whole. In East Asian industrial giants, heads of giant corporations are highly respected individuals who assume significant societal responsibility on a personal level. And this is respected by the general public, the elites, and the PR class on a general level. So admissions of guilt can be made as a part of common understanding that everyone is working for a common good.
In US, it's much more cutthroat style competition society instead. This has upsides and downsides. One of the downsides is that there's much less agreement on the common good being goal for entire society, and various interests are much less willing to cooperate. And that means that these sorts of public apologies are not really useful for seeking the common good, and are instead used to prop many of the divergent special interests at the cost of the one making the apology.
Different culture, same action, different outcome. That's what Toyoda discovered when he made the rounds in US. In Japan, apology would be accepted in the spirit it's issued, those harmed would be reasonably compensated, and company would have significant internal pressures to fix the problem to public satisfaction, as it would be treated as a problem on which the head bet his face (as in cultural aspect, not the body part) on. So it's an issue that concerns everybody. That's why TDK had videos like this as an intro for all employees.
Now that I think of it, lack of culture of face in the West would probably be one of the main reasons why this just doesn't work in the West.
Re: Luckyo gaslightin again (Score:2)
Re: (Score:3)
Little story here in support of your statement:
my younger brother worked at a plant that made floppy disks back in the late 80's, it was bought by a japanese company, Kao, Inc. they became what was then called Kao Infosystems. the top brass at Kao came for an inspection of the company and all the top engineers were required to show up... So, my brother was there. The managers and other engineers were proud of their brand n
Re: (Score:2)
3) If their actions cause injury/death/illegality then make them pay the same penalty that a homeless wino would.
Being rich/powerful in the Untied States means being able to do whatever you want and never have to risk being effectively disciplined. Just look at how many blatantly illegal scams and outrageously illegal actions the Trump family carried out before Dolt 45 became pres-idiot. How many of our rich and powerful were found to be involved with the 220,000 shell companies created by Monseck-Fonseca
Re: (Score:2)
Re: (Score:2)
Two months of that was 'house arrest', and I think that she was given partial credit for time before her sentencing. If you or I had evaded taxes to the extent she had we would have been serving almost the full 16 years. Even then she was given a pass on a long laundry list of other crimes, the tax evasion was one of the least important.
Re: (Score:2)
Re: TDK (Score:1)
Re: TDK (Score:2)
Don't make it look like there is a Japanese culture that allows subordinates to point out issues. Look at Fukushima. There were those who knew it was stupid to put the generators in the basement next to the sea, but you cannot embarrass the boss by pointing this out.
There needs to be a willingness to accept that you didn't know everything, and that by hearing from others, you get wiser and things get better.
Re: (Score:2)
I specifically stated that:
>This has upsides and downsides.
And then specifically prefaced the rest of my post in the opener of the very next sentence:
>One of the downsides is that
Your complaint would make sense if I pretended that there are no upsides to culture of more cutthroat competition, or if I offered an exhaustive list. I however made it very clear that my goal is to do nothing of the source, and specifically address this issue only.
Re: (Score:2)
lack of culture of face in the West
The West in general does have such a culture. It's the US in particular that has such a distorted view of it. Specifically, the constant avoidance of blame, deflection of responsibility, and accusations toward others are all manifestations of that view. I.e. They try to "save face" rather than "build face."
This view is the result of two things:
1) Being constantly told from a young age, that Americans are #1 and that as such, everyone else is beneath them. (I.e. Pride)
2) Corporate profits benefit great
Re: (Score:2)
Here's another way to look at it. Pride and greed are both cardinal sins in Christian culture. US culture is a Christian culture, built on Christian values all the way down. It's only very recently that modern Western Marxist movement managed to start cracking it apart.
Neither of the two sins is a major part of the American culture in a significant way because of it. At least, not yet. America is proud of its actual accomplishments, not its supremacy. If anything, it feels some guilt for the latter. East As
Re: (Score:2)
Yes, that is the projection from Chinese point of view. Your point of view. It's what you would do if you were in position of being a sole global hegemon. Because you truly believe yourselves to be a different genus of humanity, and citizens of The Middle Kingdom who should be prideful and greedy.
Your projection is wrong as usual, because this Chinese insularity you're demonstrating really creates extreme myopia in terms of world view. The main reason why US remains the sole global hegemon today is because
Re: TDK (Score:2)
Re: (Score:2)
I like the 'shooting people' part where there is clear malfeasance and clearly deaths have happened because of it. Because, you really wouldn't have to shoot many people before the other CxO's would realize that their heads would be the next to get a lead enema.
Then we would probably have at least one generation of not allowing such shoddy workmanship to be done in the name of profit.
Of course, the real problem seems to be that people worship at the idol of profit in the USA... I am no
Re: (Score:2)
The approach TDK used requires something Boeing executives do not have: Personal honor and integrity.
Getting closer to the (Score:5, Informative)
TINA. There is no alternative. Not if you want to buy a big new commercial jet sometime in the next decade. You cant ask Airbus. Their order sheet is already stretched past the limits. A Chinese company? Russian? Dont make me laugh. Their products in this category would make a MAX look like a dream product.
But admitting fraud is a serious escalation for a big company like that. Theyve still got time to turn things around, but Uncle Sam must be getting desperate to splash some water into Boeings face if theyre demanding criminal confessions. They bleed ANOTHER billion dollars, and if it goes another round, there could actually be people sent to prison. This might actually focus the minds of some Boeing executives. Nothing else has so far.
Re: (Score:2)
I do not think Boeing can recover. They are too badly broken. Greed and dishonor pervades the company.
Better get used to the idea of flying a lot less.
Re: (Score:2)
Make-or-break point for the company. Boeing is critically important. There is literally no other company in the world that could replace it. Not anytime soon. Large jets are some of the biggest and complex machines on the planet. Comp-sci types here are used to manufacturing that can be spun up in months and super fast product iterations. That wont work for something like this. A replacement for Boeing and its jets would probably take literally a decade or more to develop and I would guess close to a 100 billion dollars of government support (Boeings current market cap)
TINA. There is no alternative. Not if you want to buy a big new commercial jet sometime in the next decade. You cant ask Airbus. Their order sheet is already stretched past the limits. A Chinese company? Russian? Dont make me laugh. Their products in this category would make a MAX look like a dream product.
But admitting fraud is a serious escalation for a big company like that. Theyve still got time to turn things around, but Uncle Sam must be getting desperate to splash some water into Boeings face if theyre demanding criminal confessions. They bleed ANOTHER billion dollars, and if it goes another round, there could actually be people sent to prison. This might actually focus the minds of some Boeing executives. Nothing else has so far.
This.
I'm at the point where I can and will pay extra not to fly on a Boeing product long haul... not for safety reasons but because Boeing have made high density seating standard in order to compete with Airbus on a lower per seat cost. The A350 and A330neo is cheaper to operate per seat, so Boeing shoved an extra seat into all their large planes. The original 777 was 9 abreast, only one airline I know of still operates this configuration (Singapore Airlines) and almost everyone else operates 10 abreast.
Re: (Score:2)
there could actually be people sent to prison.
To dream
The impossible dream
To fight
The unbeatable foe
You might want to change your handle to Don Quijote. None of these people are going to jail in the foreseeable future, unless they make the mistake of ripping off rich people. They don't care what happens to us "useless eaters" (as the Bush family refers to us), as long as we continue to worship them as modern god-kings.
Re: (Score:2)
This problem is not limited to the poors. Those two MAX jets that crashed probably feature in a lot of nightmares of first class passengers that are closely connected to the elites. Boeing should be taking this seriously.
Re: (Score:2)
If a company repeatedly makes the same mistakes which ends up costing hundreds of people their lives, but that company is too big to fail without causing severe economic and logistic hardships for their home nation, most civilized countries would nationalize that company. Imprison the Boeing leaders that engaged in the fraud committed in this 737 MAX scandal and take over the company. Install people to actually oversee that all regulations are being followed. Seek comments f
Boeing is too big to fail (Score:2)
It's the only commercial passenger jet manufacturer in the USA, and letting it fail would give Airbus a world-wide monopoly, and open the door for China to slip in.
They need a strong plan to get back on track, which may require backing off from a punishment hunt a bit.
Whoever let them merge with Douglas should also be whipped, by the way.
Re: (Score:3)
No, it doesn't require backing down from punishment. On the contrary. It requires punishment to hit those who caused this mess, because they are the ones that have to be removed if Boeing is to make it out of the mess.
Economists at the wheel, the result of merging with Douglas, is the problem. Staying the hand and leaving those economists to continue to destroy the company is not the way to get it back on track.
Re: (Score:1)
> It requires punishment to hit those who caused this mess
Good luck with that. Most experienced bureaucrats know how to deflect and hide blame.
Re: Boeing is too big to fail (Score:2)
what the hell were they thinking even building it (Score:2)
Re: (Score:2)
The C-levels were thinking: "We can make even more money! Nice! Let's do it!"
And the engineers were thinking: "Do I want to keep my job or point out how deeply flawed this is?"
As a result, the C-levels responsible (including old and current CEO) should spend a few decades behind bars.
Murder (Score:1)
Re: (Score:2)
That's only true in this case if you believe like Mitt Romney that corporations are people. This isn't actually touching any of the douchebags who were responsible for laying off all the experienced programmers and giving the contract for the MCAS to a company that normally worked in the financial sector. Nor is it going to touch the douchebags who ran the company that took the contract, even though they knew before bidding that they had no experience handling realtime inputs or life safety programming.
U.S. Justice captured (Score:1)
No further truths from the catastrophic disasters writ large in BOEING name need be brought to justice - a symbolic judgement in form of cursory oversight, token penalty and proforma guilt-pleading is just another done deal. Its criminal behavior, acts of criminal omissions and errors in product design no longer remain liable. Burden, loss and private inconvenience resolve to a shared sum in dollar judgement agreed upon without the private involvement. THAT is empire slapping individual sovereignty as it wa
Re: (Score:1)
This is an example of an empire overriding
Grand jury the sons of bitches. (Score:2)
That's it? (Score:2)
That's it? Let's see how much this affects them:
Boeing Annual Net Income (Millions of US $):
2023 $-2,222
2022 $-4,935
2021 $-4,202
2020 $-11,873
2019 $-636
2018 $10,453
2017
BOEING an opportunity for SpaceX disruption (Score:2)
BBC > The aerospace giant currently has orders for more than 6,000 jets, representing years of production. Its great rival Airbus has an even larger backlog
There appears a mfg misalignment in development, design and manufacture of commercial aviation aircraft neither BOEING not Airbus were built to solve. SpaceX was and has solved design, development and manufacturing bottleneck for non-terrestial transport. SpaceX founder Elon Musk ingeniously solved for the affordability of Space itself. Tesla cofounde
Re: (Score:2)
I dunno if I want to fly in an aircraft developed by a company who treats "unplanned rapid disassembly" as "the way to do business." And I won't drive a Tesla, either. But then, I have basically no confidence in the automotive industry when it comes to (software intensive) system safety. I've looked at some of the standards and processes, and find them to be a lot weaker than what Boeing should have been doing (and used to do, like Airbus still does) for aircraft system safety.
Punishment only works on people. (Score:5, Insightful)