Boeing and DoJ – A Travesty of Justice?

Boeing and the United States Department of Justice, DoJ, have reached yet another plea agreement resulting from the crashes of two 737 MAX aircraft in 2018 and 2019. This latest agreement differs from the last agreement between the parties that was rejected by a Federal Court judge in Texas last year, citing Diversity, Equity, and Inclusion actions as a reason to reject the agreement. That agreement would have resulted in Boeing pleading guilty to a felony, which somehow is now missing from the latest agreement. A felony conviction could have become disqualifying for Boeing, as it bids on federal government contracts. Of course, that would be a disaster for the largest US defense contractor. When the prior agreement that the judge threw out was released, we were quite surprised that Boeing would accept the felony conviction and admission of guilt. Somehow, both the DOJ and the company have now changed their mind, albeit the circumstances of Boeing’s actions have not changed. A Slam-Dunk Case? It is abundantly clear to most observers that Boeing would likely be convicted should the case against them ever reach trial. The company did mislead the FAA during the certification process for the 737 MAX, which was quite clear in internal e-mails obtained during discovery and made public after the crashes. Boeing was always “behind the power curve” with the MAX. Airbus surprised Boeing by introducing a re-engine A320neo series of aircraft in 2011. Boeing didn’t initially respond, but after American Airlines signaled its intention to buy 400 Airbus aircraft, quickly pulled together the design for the MAX, which it launched in 2012. Being a year behind its competitor, Boeing was pushing hard to get their aircraft certified quickly and on budget, since it was still feeling the financial pinch from cost overruns on the Boeing787 Dreamliner, that finally entered service in 2011. The fraud that Boeing was willing to admit to last year had the company downplaying the potential severity of the MCAS system to the FAA. The reason that system was ever included on the airplane was to make the new airplane fly similarly enough to the older version so that airlines would not have to incur the cost of simulator training for pilots. In fact, the contract between Boeing and Southwest airlines had a $1 million per aircraft penalty clause if simulator training became necessary, and Southwest had ordered more than 300 aircraft. That’s $300 million reasons to avoid simulator training. The MCAS system is part of the flight control system for the aircraft, that was designed to mimic the behavior of prior models. Unfortunately, it was poorly executed and essentially created a self-crashing airplane. After the first crash, it became clear that if pilots were initially not even informed of the existence of the system, which wasn’t included in the aircraft’s flight manual. It also became clear after the second accident that if pilots did not react within a few seconds to shut off the electric trim features, they could lose control of the aircraft to forces that they could not overcome, even in manual mode, inevitably resulting in the loss of the aircraft. The reason that the airplanes crashed was due to a design flaw at Boeing, in which reliance on a single point of failure was built into the aircraft flight control software, something that should never happen in aviation. Aircraft require back-up systems for everything, as the potential catastrophic results of a component failure are too serious to ignore. Boeing ignored a cardinal rule of aircraft design, which is to never have a single point of failure, and that every system needs a back-up to rely on. Even if Boeing were to win their case at trial, the public disclosure and media coverage of the design flaws of the aircraft, and Boeing’s actions, would undermine the public’s confidence in the airplane, which has been returning since the flaw was fixed after the second crash and lengthly grounding of the fleet. Thus, a plea agreement was always the best option for Boeing. Boeing couldn’t afford a re-hashing of the crashes in the nightly newscasts. The Sweetheart Deal Timeline In January 2021, Boeing and the DoJ reached an agreement during the final days of the first Trump administration that, essentially, let Boeing off the hook for criminal prosecution. That deal had a provision that Boeing had to have a clean safety record with the MAX for three years to be finalized, by January 7, 2024. That deal included fines and payments to victim families and airlines, but a great portion of those requirements were already met by payments to airlines in the normal course of business. On January 5th, 2024, a door plug blew off of an Alaska Airlines 737 MAX 9 because four bolts were missing, placing Boeing in violation of the agreement, two days before it was scheduled to be final. That incident reset the playing field, requiring a new agreement, and brought the company under additional FAA scrutiny, including production rate limitations for the MAX that remain in effect today. A new agreement was struck in mid-2024 with the Biden DoJ, but this one included Boeing pleading guilty to a felony fraud charge. That agreement would have resulted in Boeing being a convicted felon, which would likely have helped any civil lawsuits against the company resulting from the crashes, and potentially restricted Boeing from contracting with government agencies. In early December, 2024, US District Judge Reed O’Connor in Texas said that DEI policies in the government and the company could result in race being a factor in picking an official to oversee Boeing’s compliance, and threw out the agreement. After several delays, the company and the Trump DoJ reached a plea deal in May, 2025 that spares the company from criminal liability for the crashes, reversing the deal reached in 2024 that had the company pleading guilty to a felony charge of conspiring to defraud the Federal Aviation Administration. The new deal includes additional fines, investments in safety, and payments to victim families, but lets the company off the hook for criminal prosecution. The Net Result: No Accountability Boeing is not admitting guilt in the new plea agreement reached with the DoJ last week. Nobody is being held accountable for a crime that had been described as the largest case of corporate murder in history. Attitudes towards corporate governance are changing, with a trend to higher levels of scrutiny for senior executives and Board members of organizations. Cutting corners and hiding details from regulators that may have extended the certification time frame and program development costs are attitudes that come from the top of an organization downward. In most organizations, employees can “read between the lines” of what senior management would like to see, and behave in those manners given cultural norms. The company's corporate culture had become toxic after a series of failed leaders that emulated ideas pushed by Jack Welch at GE on cost-cutting and efficiency. As it turns out, those practices tend to cut muscle as well as fat, often removing the most expensive, but most knowledgeable employees who know how to get things done. The culture at Boeing moved from being engineering driven to financially driven, leading to the unfortunate results and 346 deaths. We know who the players that created the toxic culture were. We also know that they walked away with multimillion dollar stock options and other perks, with no accountability for their actions. Did a travesty of justice occur with the plea agreement between the DoJ and Boeing? We believe it did.

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