Boeing has finally hit rock bottom.
The US Department of Justice will charge Boeing with criminal fraud, Bloomberg reported, leaving the planemaker to choose between pleading guilty or taking the risk of going to trial, just as the company finalizes its acquisition of Spirit Aerosystems for $4.7 billion.
Boeing has until the end of the week to decide whether to plead guilty to the charge, the department told the families of victims of two fatal 737 Max crashes and their attorneys in a meeting Sunday, Bloomberg reported citing “people who asked not to be named.”
Yet contrary to speculation that the DOJ would seek a pound of flesh from the Chicago-based planemake, the department will only pursue a proverbial slap on the write as it informs Boeing it will have to pay an additional criminal fine of only $243.6 million on top of the $243.6 million already paid with a 2021 deferred-prosecution agreement, bringing the total amount of fine close to $500 million, or roughly the price of five of the giant paperweights better known as 737 MAX airplanes. The company will also have to hire a corporate monitor for three years, they said.
Officials from the Justice Department’s fraud section and the US Attorney’s Office for the Northern District of Texas attended the Sunday meeting, according to an email seen by Bloomberg. Paul Cassell, an attorney representing the crash victims’ families, called the offer the department plans to make to Boeing a “sweetheart plea deal.”
“The deal will not acknowledge, in any way, that Boeing’s crime killed 346 people,” he said in an email. “The families will strenuously object to this plea deal.”
The fine the department will seek falls far short of a nearly $25 billion fine the families requested — with the possibility of suspending $14 billion to $22 billion of that if Boeing devotes those funds to an independent corporate monitor and improvements to its safety programs. In fact, the total punishment is far less than the monetary damages slapped on Alex Jones, even though last time we checked nobody died as a result of Jones’ newscast.
Sweetheart deal or not, a guilty plea to criminal charges would mark a low-point in Boeing’s century-long history and a stunning development for a company that was once renowned for its cautious, straight-laced culture which has since devolved into a DEI-driven, virtue signaling nightmare that has culminated with planes “designed by clowns…supervised by monkeys.”
According to Bloomberg the plea deal “raises concerns over US government contracts for the company at a time when Boeing needs its defense division to counteract plunging revenue at its commercial airplane business.” Of course, that’s not even remotely true since the deep state is intimately involved in using taxpayer funds to pay off contractors such as Boeing for perpetuating the US war machine, while it collects its 10% commission in perpetuity.
The meeting comes after the Justice Department determined the planemaker violated the 2021 deferred-prosecution agreement struck between Boeing and the government in the waning days of the Trump Administration. The deal allowed Boeing to avoid criminal prosecution as long as it met certain conditions. But in May, the department concluded the company had failed to meet a requirement to implement an effective compliance program to prevent and detect violations of US fraud laws. Boeing told the DOJ that it disagreed with the finding.
At the same time, the planemaker is in the midst of a leadership shakeup as it searches for a new chief executive officer to take over for Dave Calhoun, who plans to step down from the role later this year but not before collecting a $33 million bonus for… it’s not exactly clear what.
And just to make it even more difficult for outside observers to keep track of things, on Sunday, Boeing agreed to acquire Spirit AeroSystems for $4.7 billion, Reuters reported citing two people familiar with the matter said, ending months of talks over a deal the U.S. planemaker hopes will help ease a spiralling safety crisis (spoiler alert: it won’t).
Boeing will pay $37.25 per share for Spirit Aero, in an all-stock deal, after the boards of Boeing and Spirit met on Sunday and agreed to terms, and an official announcement is likely early on Monday. The acquisition values Spirit at around $4.7 billion.
The deal, which is subject to regulatory approvals, would result in the breakup of Spirit, with some of the Kansas-based supplier’s assets going to French planemaker Airbus.
Boeing is trying to move past a year of difficulties sparked by a Jan. 5 mid-air blowout of a door plug on a new 737 MAX 9 jet that exposed myriad safety and quality problems. Those issues have led to a substantial slowdown in output at Boeing – rippling across the global commercial aviation industry.
And because two wrongs can somehow make a plane that flies, Spirit – which was spun off from Boeing in 2005 in one of a series of moves that critics say were emblematic of a focus on cost-cutting over quality – is the manufacturer of the defective door plug. So instead of punshing it, Boeing is rewarding its supplier by acquiring it just to make sure its DEI-infused workforce can kill even more people.
Boeing made the decision to buy back Spirit in the aftermath of the Jan. 5 incident, which took place on an Alaska Airlines-operated flight, as part of an effort to reform its safety problems and shore up its production line. Earlier, Boeing discussed paying $35.50 per share in cash for Spirit, but this was raised to $37.25 when the agreement shifted to stock. The terms of a parallel deal for Spirit to sell its Europe-focused operations to Airbus were not immediately clear.
Buying Spirit Aero will not immediately resolve Boeing’s problems. Following the January door plug incident, the Federal Aviation Administration imposed a cap on production of Boeing’s best-selling MAX jets.
And with faith in Boeing among the flying public at an all time low, the once iconic US company has been losing market share to Airbus for years, and it is still dealing with the aftermath of twin crashes that killed nearly 350 people and forced a grounding of the 737 MAX.
Those crashes led to the appointment of current CEO Dave Calhoun, who was brought in to resolve the problems at the manufacturer, but who will leave later this year with the company under greater regulatory scrutiny and with a reputation that has taken a beating.
U.S. senators on June 18 sharply criticized Calhoun for the planemaker’s safety issues and repeatedly questioned him about his salary. Some airlines have vented their frustration with Boeing publicly and privately due to delivery delays and the company’s ongoing issues.
Boeing recently submitted a comprehensive plan to the FAA addressing “systemic quality-control issues” at the company. We just can’t wait to find out what percentage of its workforce will have to be women and minorities after the “quality control” overhaul.
Tyler Durden
Sun, 06/30/2024 – 23:20
