Boeing must either plead guilty to felony fraud or go to trial against the US government as the next step in a criminal case stemming from its door panel blowout, according to the latest terms offered to the company by the Department of Justice. Under the potential plea agreement, the airline would plead guilty to one charge of conspiring to defraud the US and pay a fine of $243.6mn, the second criminal penalty of this size in the case, according to someone familiar with the matter. The move comes after the DoJ notified Boeing it had breached the deferred prosecution agreement it signed in 2021 in the wake of the fatal Lion Air and Ethiopian Airlines 737 Max crashes. The notification followed the mid-air blowout that terrified passengers of an Alaska Airlines flight earlier this year. The potential agreement, which was communicated to Boeing and the victims’ families on Sunday, would also require Boeing to accept a government-appointed monitor as well as three years of probation, said the person familiar with the matter. Boeing has until close of business Friday to respond to the DoJ, after which US courts must be notified by midnight Sunday. Boeing declined to comment. Paul Cassell, a lawyer who represents families of victims in the 737 Max crashes, said the DoJ was “preparing to offer to Boeing another sweetheart plea deal”. Families “will strenuously object to this plea deal” and “plan to send a formal objection to the Justice Department soon,” he added. Agreeing to a guilty plea could raise questions around Boeing’s ability to secure contracts with the US government, which make up a significant portion of its revenue — an increasingly important source of funds as the business faces steep costs in its commercial division. <br/>
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The US Justice Department is nearing an agreement with Boeing that would include a corporate monitor and a fine in exchange for a guilty plea to criminal charges, according to lawyers representing the families of victims of two fatal 737 Max crashes, who harshly rebuked the offer as a “sweetheart deal.” The criminal charges and potential plea deal come after repeated safety failures at Boeing that have resulted in multiple federal investigations and a sharp rebuke from airlines, customers, lawmakers and regulators. Criminal charges against a major corporation like Boeing are rare and would represent a serious blow to the company’s already precarious financial situation and further damage its battered reputation. But the victims’ families said they were furious that Boeing may avoid trial, saying the government is letting the company off the hook for the deaths of their loved ones. “I can tell you that the families are very unhappy and angered with DOJ’s decisions and proposal,” said Robert Clifford, lead counsel in the civil litigation against Boeing, in a statement. “There is no accountability, no admission that Boeing’s admitted crime caused the 346 deaths, and the families will most certainly object before Judge Reed O’Connor and ask that he reject the plea if Boeing accepts.” Clifford and Paul Cassell represent many family members of the 2018 Lion Air crash and 2019 Ethiopian Air crash victims of Boeing 737 Max jets. They and some of the families they represent were briefed by the Justice Department Sunday about the plea deal.<br/>
Six months after a fuselage blowout threw Boeing Co. into crisis, the full weight of the legal and financial fallout from the near-catastrophic accident is bearing down on the embattled US planemaker. The US Justice Department plans to charge Boeing with criminal fraud after finding the company violated a 2021 deferred-prosecution agreement tied to two previous, fatal crashes, Bloomberg News reported late on Sunday. Just hours later, Boeing announced a plan to buy back Spirit AeroSystems Holdings Inc., a supplier it spun off two decades ago, for $4.7b in a bid to improve manufacturing. The intertwined developments reveal the sheer magnitude of Boeing’s current troubles. The planemaker now has a few days to make a tough legal choice: plead guilty or go to trial, neither of which are without risk. The Spirit deal, meanwhile, will saddle Boeing with more debt and tie up the manufacturer with the complex task of turning around operations at a contractor that’s suffered from poor workmanship for years — at a time when Boeing’s own facilities aren’t running smoothly. Neither of Boeing’s legal options are particularly appealing. Pleading guilty and accepting a fine potentially locks the company out of important government contracts and might lead to higher compensation to families of victims in the two crashes. But going to court creates an uncertain legal overhang for whoever follows Chief Executive Officer Officer Dave Calhoun, who has said he will step down by year-end at the latest. “Either way, this is a terrible outcome for Boeing,” Nick Cunningham, an analyst at Agency Partners in London, said of Boeing’s legal options. With Spirit, “Boeing gains very little from this transaction and would not have chosen to do it, given that it only spun Spirit out about 20 years ago.” The US planemaker said Monday that it will pay $37.25 a share for Spirit in an all-stock deal. The total transaction value is about $8.3b, including Spirit’s last reported net debt. Arch-rival Airbus SE, meanwhile, gets to walk away with some parts of Spirit that make components for the European planemaker, and stands to get $559m in compensation.<br/>
Europe's Airbus on Monday set out the terms under which it plans to buy certain loss-making activities of Spirit AeroSystems as part of a planned wider break-up of the supplier between Airbus and rival Boeing. The deal involves Airbus taking over work at loss-making plants that supply key parts for its A220 and A350 passenger jets. Airbus will be compensated for agreeing to take on the work by a payment of $559m from Spirit, while it will pay a nominal sum of $1 for the assets, depending on the final outline of the deal, it said in a statement. The European planemaker did not specify the mechanism of compensation, which stems from the financial condition of activities it is acquiring as a result of Spirit's decision to sell the rest of the company back to its one-time owner Boeing. Airbus, which last week trimmed delivery and production forecasts, said the deal would "ensure stability of supply for its commercial aircraft programmes through a more sustainable way forward, both operationally and financially".<br/>
Airbus delivered a preliminary total of around 67 airplanes in June, bringing the total for the first half of the year to around 323 aircraft, up 2% from the same period last year, industry sources said on Monday. Airbus, which last week cut its delivery forecast for the full year to 770 planes from 800 amid supply chain concerns, declined to comment ahead of the release of monthly and half-yearly data expected on July 8.<br/>
Gate Gourmet and unions representing some of its workers were released from mandatory labor talks, moving the airline catering company one step closer to a strike that would cause problems for US carriers this summer. The National Mediation Board said Monday that a 30-day “cooling off” period had begun for the company and labor groups Unite Here and the International Brotherhood of Teamsters. Without an agreement or intervention from the White House, a walkout could occur as early as July 30, the board said in a statement. The employees are barred from walking off the job until then under the terms of the Railway Labor Act, which governs union relations in the air travel industry. “While Gate Gourmet presented an industry-leading offer to the union at our latest negotiations, we were unfortunately unable to come to an agreement,” the company said in an emailed statement. Gate Gourmet said it will continue to work toward a deal that “recognizes our valued employees” and avoids disruption. Unite Here didn’t immediately comment on the NMB action. The pro-labor Biden administration has been hoping that pressure from the NMB would lead to agreements and avoid any disruptions during the busy summer travel season. Mediators are also overseeing negotiations between American Airlines Group Inc. and the Association of Professional Flight Attendants.<br/>