DBEA55AED16C0C92252A6554BC1553B2 Clicky DBEA55AED16C0C92252A6554BC1553B2 Clicky
July 22, 2024
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Today’s key stories focus on the implications of yesterday’s acceptance of what is described as a “sweetheart” plea deal agreed on by Boeing and the DOJ.  The impacts are significant, as Boeing is now a corporate criminal and convicted felon.  Having defrauded the US government, Boeing would normally be prohibited from government contracts, which would cripple its defense business or require it to be spun off.   Given that Boeing’s cultural problems began with the McDonnell-Douglas acquisition, perhaps a spin-off of defense and space would be a good place for a new CEO to start.

But just because the criminal charges were settled, civil charges, including wrongful death, remain in play and the MAX crash victims’ families are ready to fight, including protesting this deal.  Analysts are criticizing the deal for not dealing with the Boeing culture and management, and the deal is also being vilified because no one from Boeing will be jailed.  A perceived lack of justice remains around this second plea deal that is very favorable to Boeing, and is being viewed as undeserved given Boeing’s inability to change five years after the last crash.

Of course, Wall Street types are assessing whether the legal turbulence will subside and provide an upside for Boeing’s stock.  Wait for what looks to be an abysmal quarter reported on the 31st of this month.

Finally, hidden among the many stories on the plea deal is the fact that new inspections will be required on 2,600 airplanes because the oxygen masks may fail in flight.  Each mask will need to be inspected to determine whether oxygen generators have become dislodged and need to be re-secured, meaning between 400,000 to 500,000 units will need to be examined worldwide.  This is another embarrassing quality issue for Boeing, fortunately for them under the radar of the MAX plea deal story today.

Links to today’s key stories follow:

  • Once high-flying Boeing is now a corporate criminal – The Economist
  • Pentagon to assess Boeing deal with DOJ before deciding on impact of guilty plea – Yahoo
  • Boeing in talks with US to preserve defense contracts business – BNN
  • Analysts fault Boeing guilty fraud plea for lack of leadership change – Flight Global
  • Why no one at Boeing will be jailed for 737 MAX crashes criminal fraud – iNews
  • ‘Atrocious abomination’: Court fight is brewing as Boeing 737 MAX crash victims’ families, lawyers rip DOJ’s ‘impotent’ felony fraud plea deal with company – Law and Crime
  • Hard landing: What does the latest 737 MAX plea deal mean for Boeing? – AviationSource
  • Legal turbulence shakes Boeing stock: Is there more altitude ahead? – Benzinga
  • FAA orders mandatory inspections for 2,600 Boeing 737 planes over oxygen mask safety concerns – Financial Express
author avatar
Ernest Arvai
President AirInsight Group LLC

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