Boeing To Pay $2.5 Billion In Federal 737 Max Settlement

SEATTLE, WA — Boeing will pay out more than $2.5 billion in a settlement with the federal government resulting from an investigation into the 737 MAX, the Department of Justice announced Thursday.

In a statement, Washington's second-largest employer said it agreed to pay $243.6 million in federal penalties, along with $500 million in compensation to the families of those lost in crashes in 2018 and 2019. The deal also includes $1.77 billion in previously agreed payments to airlines, meant to offset financial losses from the grounding of all 737 MAX jets.

The Federal Aviation Administration cleared the planes to fly again in November.

As part of the agreement, the Seattle Times reports that Boeing acknowledged its employees misled regulators about safety systems during the certification process.

Boeing writes:

The agreement is based on the conduct of two former Boeing employees and their intentional failure to inform the FAA Aircraft Evaluation Group (AEG), the group within the FAA responsible for making pilot training determinations, about changes to the Maneuvering Characteristics Augmentation System (MCAS). As a result of this conduct, the agreement states that the FAA AEG was not fully informed about MCAS’s expanded operating range when it made its training determinations for the MAX. While focusing on the conduct of these two former employees, the agreement recognizes that other Boeing employees did inform other officials and organizations within the FAA about MCAS’s expanded operating range in connection with the certification of the 737 MAX.

David Calhoun, Boeing's CEO, wrote to employees that the settlement served as a reminder of the importance of transparency.

"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 our expectations," Calhoun wrote. "This resolution is a serious reminder to all of us of how critical our obligation of transparency to regulators is, and the consequences that our company can face if any one of us falls short of those expectations."

Under the terms of the agreement, the government will not pursue criminal charges if Boeing adheres to the terms for three years. The Associated Press reports the company still faces separate lawsuits from the families of the more than 500 passengers killed in the Lion Air and Ethiopian Airlines crashes.

In the wake of the 737 MAX grounding and steep losses related to the pandemic, Boeing has cut its Washington workforce by nearly 20 percent since the beginning of 2020.