Boeing's announcement Sunday that it had agreed to plead guilty to federal criminal charges as part of a settlement with the Justice Department marked the culmination of a years-long crisis surrounding the company's 737 Max jetliner.
The agreement could help Boeing put an end to federal lawsuits stemming from two fatal 737 Max crashes in 2018 and 2019. But it's not the final conclusion to that saga and may have little impact on other issues, including questions about the company's manufacturing quality that came to light when a panel on a Max jet blew off during a flight in January.
Here's what you need to know about Boeing's deal with federal prosecutors and other challenges the company is grappling with.
What do you expect to happen next?
Boeing and the Justice Department first reached a settlement over the two crashes in 2021 that spared the company criminal charges, but federal prosecutors this year offered a new settlement, accusing the company of violating the terms of that agreement, which was agreed to in principle on Sunday.
Under the latest agreement, Boeing will plead guilty to conspiring to defraud the federal government. The company will also agree to an independent monitor, three years of probation, and additional fines, including a $487.2 million fine, half of which could be waived due to fines Boeing has previously paid.
However, the deal is not yet official.
“Some people hear there's a plea deal and think it's the end of the road, but that's not necessarily the case,” said Kaya M. Henry, a white-collar crime lawyer and former public defender.
The formal agreement is expected to be filed in federal court within days, after which the judge in the case will review it, but it is strongly opposed by many of the families of those killed in the two crashes.
If the judge rules in favor of the families, Boeing and the Justice Department will have to work out a new deal.
If not, an independent committee would select the monitor, with the final decision coming from Deputy Attorney General Lisa Monaco. The Justice Department has said it will solicit names of candidates for the job from the public and take into account feedback from Boeing.
Why are families unhappy and what can be done?
The families remain deeply disappointed with the way the Justice Department handled the case against Boeing. Despite getting the company to plead guilty to criminal charges, the families' lawyers say prosecutors have failed to hold the company or its executives responsible for the two crashes that killed 346 people.
“I don't think this agreement is adequate,” said Erin Applebaum, a lawyer who represents 34 families who lost loved ones in the second crash in Ethiopia. “I don't think it adequately addresses the root causes of Boeing's problems.”
Applebaum said the only way to get meaningful change at Boeing is to take action that affects the company's bottom line, which would mean bigger fines and tougher penalties. He also criticized the decision to consider public suggestions for an independent monitor as “mere kudos,” noting that the Justice Department has the final say.
For now, the families are hoping to convince a judge to reject the deal, arguing it would not improve public safety. Separate civil lawsuits brought by the families against Boeing are scheduled to go to trial later this year.
Who will be the monitors and what will they do?
As part of the terms of Boeing's three-year probation, the Justice Department will appoint an independent compliance monitor who will have the powers of a probation officer and will submit annual reports to the government to ensure the company is complying with safety measures.
The monitor's report could signal changes to the company's manufacturing processes or quality control. Similar monitors have been deployed at other companies, including Apple and Deutsche Bank, as part of settlements with federal prosecutors.
It is not yet clear who the government will appoint for the role, but in this case, the watchdog is likely to be an aviation expert.
“Nobody wants their files to be subject to unfettered surveillance,” said John C. Coffee, a Columbia University law professor who specializes in corporate governance, “which is why they're likely to be very sensitive about who is being surveilled.”
The scope of the monitor's powers will depend on the fine print of the final agreement. Several key questions remain unresolved, such as whether the monitor can communicate its findings directly to the judge and whether the judge can impose fines accordingly. Coffee said those questions should be resolved in the final agreement.
Veronica Root Martinez, a law professor at Duke University who studies corporate fraud and compliance, said court oversight is almost certain because the oversight effort stems from a guilty plea and the report is publicly available in the court docket. Monitors are likely to engage with company insiders to draft recommendations and ensure compliance with the plea agreement.
“It's not necessarily just a passive observation,” Martinez said.
If Boeing were to plead guilty, what other implications would that have?
The guilty plea puts Boeing's lucrative government contracts at risk: Companies convicted of certain felonies cannot win government contracts unless they receive a waiver. Boeing is in discussions with the Defense Department about the fate of those government contracts, according to a person familiar with the matter.
Disruption to Boeing's defense and space division could be devastating to the company's business, said Loren Thompson, a longtime aerospace analyst, whose government contracts account for more than a third of the company's revenue.
Thompson said Boeing's defense business has declined for decades while other manufacturers made profits. “Any further disruption to new defense orders would be very detrimental to the company's product portfolio,” he said.
It was not immediately clear whether the plea deal would have any impact on a separate investigation into the January blowing off of the cockpit of an Alaska Airlines Max jet. The FBI, which is investigating that case, declined to comment.
