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United States The Courts

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.

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Boeing Will Plead Guilty To Fraud Related To Fatal 737 Max Crashes

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  • by kmoser ( 1469707 ) on Sunday July 07, 2024 @11:30PM (#64608421)
    Jail. Let me say it again: jail.
    • by eonwing ( 934274 )
      I have a different word about what this is: bullshit.
    • by gijoel ( 628142 )
      Fucking A, to quote the classics.

      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.
    • by gweihir ( 88907 )

      Yep, that would be right and it would be _just_. Not going top happen though.

    • by CEC-P ( 10248912 )
      Wait, wait, wait, hold on. Are you saying that penalizing them monetarily will only take away more resources from hiring proper managers and employees with proper safety standards? And that the people responsible should be removed from society for their greed and negligence as a chilling effect to others while also removing from them the company so they don't do it again? THAT CAN'T BE IT. That makes too much sense.
    • 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.

      • each exec will point at the person below them, who will point at the person below them, until you reach people at the actual working class, then they will be left holding the bag. The exec's (all with MBA's) will all claim they had no idea and that the person below them, who summarized the situation for them to sign off on it, because they are way to busy to actually read the thousands of pages of checks and reports, should have told them... and that's the way it will go, if anything happens to actually try
  • by fuzzyfuzzyfungus ( 1223518 ) on Sunday July 07, 2024 @11:46PM (#64608435) Journal
    I'm sure that there's some sort of compelling logic behind the theory that someone who breached the last deferred prosecution agreement and kind of shrugged at the civil penalties will take the smaller civil penalty and new agreement to totally not do bad things in the future entirely seriously...
  • by madbrain ( 11432 ) on Monday July 08, 2024 @12:00AM (#64608463) Homepage Journal

    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)

    by Fons_de_spons ( 1311177 ) on Monday July 08, 2024 @12:43AM (#64608529)
    I once worked for TDK. They had a small ritual for new people. You had to watch a documentary about a fire in a nursery home. It was caused by a fault in a humidifier produced by TDK. They traced down the issue. It was not neglect, it was a rather stupid issue that could have happened to all of us.
    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)

      by Luckyo ( 1726890 ) on Monday July 08, 2024 @01:42AM (#64608585)

      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.

      • Maybe it is time for change. But I am preaching to the wrong people here. Anyone got the email of Boeing execs?
        • Re: TDK (Score:4, Insightful)

          by Luckyo ( 1726890 ) on Monday July 08, 2024 @04:37AM (#64608759)

          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.

          • "It has everything to do with culture within the nation as a whole." It's also a safety issue and there is a safety regulator which allowed the airframe changes to be squeezed into existing type certification to allow avoiding pilot retraining. Many FAA lifers should be fired for this, instead of being allowed to continue to coast and pad their government pension. The FAA also has a culture problem.
          • 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.

            • by Luckyo ( 1726890 )

              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.

          • 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

            • by Luckyo ( 1726890 )

              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

    • by gweihir ( 88907 )

      The approach TDK used requires something Boeing executives do not have: Personal honor and integrity.

  • by hdyoung ( 5182939 ) on Monday July 08, 2024 @01:39AM (#64608583)
    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.
    • by gweihir ( 88907 )

      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.

    • by mjwx ( 966435 )

      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.

    • by cusco ( 717999 )

      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.

      • Too many people fly on Boeing jets, including senators, executives, their spouses and their kids. Rich people don’t always fly private, either.

        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.
    • TINA. There is no alternative

      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

  • 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.

    • 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.

      • by Tablizer ( 95088 )

        > It requires punishment to hit those who caused this mess

        Good luck with that. Most experienced bureaucrats know how to deflect and hide blame.

    • Nationalize it then. Being "too big to fail" (bullshit notion, but w/w) is not a get out of jail free card. Arrest the executives, dissolve the corporate entity, seize all the assets and appoint someone to run the operations until such a time that it's deemed fit to be privatised again (if ever; not everything should be run by the private sector).
  • you cant safely cobble together parts from one aircraft onto another and not expect major problems and you wont solve that with special custom made software, now when it comes to cars you can do it because if a car breaks down you just pull over onto the shoulder on the side of the road, with aircraft when they fail there is NO place to pull over up there in the sky so they just crash into the ground and kill everyone on board
    • by gweihir ( 88907 )

      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.

  • If these were regular people then this would be 2nd degree mass murder. But wealthy people only get fraud.
    • by cusco ( 717999 )

      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.

  • 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

    • No further truths need to be brought to justice regarding the catastrophic disasters associated with BOEING. The symbolic judgment, consisting of cursory oversight, token penalties, and pro forma guilt-pleading, is just another done deal. Boeing's criminal behavior, acts of omission, and errors in product design are no longer considered liable. The burden, loss, and inconvenience are resolved in a shared monetary judgment agreed upon without private involvement.

      This is an example of an empire overriding
  • And not just fraud: Hundreds of counts of negligent homicide.
  • $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

    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
  • 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

    • 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.

  • by GotNoRice ( 7207988 ) on Monday July 08, 2024 @01:26PM (#64610347)
    The solution here is to find the PEOPLE who made bad decisions and hold THEM accountable. Punishing the company just shields the people who are actually responsible while hurting everyone else.

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