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Boeing, With Settlement, Looks to Move on From 737 Max Crisis

Bill Koenig
By Bill Koenig Senior Editor, SME Media

COMMENTARY

Boeing Co. this week said it agreed to pay more than $2.5 billion because of fatal crashes stemming from problems with the 737 Max. The company is looking to the settlement as a way to move on from a corporate crisis.

The Chicago-based maker of aircraft will pay the U.S. government a $243.6 million fine; another $500 million to families of those killed in two fatal 737 Max crashes; and $1.77 billion to its airline customers for losses stemming from the grounding of the 737 Max.

The U.S. Justice Department agreed to defer prosecution for three years as long as Boeing “abides by the obligations” of the accord, according to a company statement. After that time, charges will be dismissed.

Issues with the 737 Max cost Boeing much of its reputation. Investigations into what happened revealed problems with Boeing’s corporate culture. The 737 Max is one of Boeing’s most important aircraft.

Boeing had been viewed as an enterprise with engineering excellence. But following the two fatal 737 Max crashes, Boeing now was seen as a company that placed profit over safety.

Boeing had been viewed as a center of engineering excellence. That image took a huge hit following the crashes that killed 346 people. The 737 Max was grounded in March 2019 as a result. In late 2019, one Boeing CEO lost his job.

Boeing is fighting to change all that. U.S. regulators in November approved the aircraft returning to the air. The company is working with regulators in other countries as well.

The company wants to put the 737 Max controversy in the past. Current Boeing CEO David Calhoun, who took command in early 2020, sent a memo to employees. A copy was embedded in a tweet by Reuters reporter David Shepardson.

Calhoun’s memo said former Boeing employees demonstrated showed “deep disrespect” to the U.S. Federal Aviation Administration concerning the 737 Max and “intentionally” failed to inform regulators about key changes in design.

“This is a substantial settlement of a very serious matter,” Calhoun wrote. The CEO said the settlement was “the right thing to do.” It was a move that “appropriately acknowledges how we fell short of our values and expectations.”

The question is whether outsiders agree with Calhoun.

That remains to be seen. Calhoun’s memo acknowledges that Boeing still faces challenges in rebuilding its image.

“While we deeply regret the conduct described in the agreement, I am confident that it isn’t reflective of our employees as a whole or the culture or character of our company,” Calhoun wrote.

The CEO may be confident. But his memo isn’t the last word. Boeing’s performance from here on out will tell the tale.

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