Federal Prosecutors Have Enough, Target Boeing as Major DOJ Deadline Approaches

If there were ever an American company I would have thought would be too big to fail, it would be Boeing.

There are two companies on this planet capable of manufacturing a wide range of large, state-of-the-art airliners: Airbus and Boeing. To challenge them would make taking on Microsoft and Apple for the desktop PC market look like a walk in the park.

And then Boeing planes started falling out of the sky.

Then, after its best-selling jet was grounded and whistleblowers began sounding alarms regarding the safety culture — or lack thereof — at the company, its reputation did roughly the same thing.

And now it’s likely going to find itself falling into a defendant’s chair in a federal courtroom.

According to a Reuters report on Monday, U.S. prosecutors have recommended to the Department of Justice that Boeing be charged with fraud for violating an agreement regarding the two crashes that led to the grounding of the 737 Max.

The DOJ must decide whether to pursue the case by July 7.

In May, the department said in a court filing that Boeing had breached a 2021 agreement shielding it from criminal repercussions over the crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 in 2018 and 2019, respectively. The two crashes claimed a total of 346 lives.

Both accidents were caused by the Maneuvering Characteristics Augmentation System, a flawed piece of software implemented in the 737 Max designed to make the plane’s flight characteristics similar to prior 737 models despite newer engines changing the center of gravity and making the plane prone to dangerous handling tendencies in certain situations.

The similarity of flying the 737 Max to prior 737 models with a minimum of additional training for pilots and crews was a selling point to airlines, given that the 737 was already the best-selling jet airliner in history.

However, a lack of crew training regarding what the MCAS did and limited autonomy for pilots to override dangerous commands issued by MCAS, among many other problematic issues with the system’s development too numerous to detail, led to both the Lion Air and Ethiopian Airlines crashes — and the plane’s grounding for nearly two years.

Not only that, but the safety culture of the aviation giant quickly came under federal scrutiny — for once, a truly bipartisan issue that transcended Republican and Democrat.

As numerous whistleblowers and other company officials testified, it quickly became apparent that the safety culture at Boeing had deteriorated since a 1997 merger with McDonnell Douglas, and there were questions surrounding the safety of all three airliners still in production at Boeing: the 737, 777 and 787.

To avoid criminal prosecution over the 737 Max crashes, Boeing was supposed to — among other things — “design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations,” the DOJ said in the May court filing.

You may not be shocked to learn that the Justice Department found the company had breached these obligations, according to Reuters.

This was not a recommendation of prosecution, however — although the filing did come as the company was still reeling over a fuselage panel blowing out on an Alaska Airlines 737 Max 9 in January.

While that flight was able to land safely, the incident highlighted yet more deficiencies in the safety processes for 737 Max contractors. In May, Reuters noted that DOJ officials were “weighing that incident as part of a broader probe into whether Boeing violated the deal, known as a deferred prosecution agreement, or DPA.”

It now appears that, no matter how much weight was given to it, prosecutors still feel that Boeing belongs in a criminal courtroom over its compliance with the 737 Max agreement.

The company claimed it had “honored the terms” of the 2021 deferred prosecution agreement, while the DOJ declined to comment. In addition, the two sides were reportedly in discussions that could keep this out of a courtroom yet again.

In the meanwhile, that’s hardly the only bad news for Boeing over the past few months.

In March, LATAM Airlines Flight 800, a Boeing 787-9, plunged precipitously during a flight from Australia to New Zealand on its way to Santiago, Chile, injuring 50 people, according to the BBC.

While the cause wasn’t directly a flaw with the plane’s manufacture, CNN reported that an exposed switch on the pilot’s seat may have been activated while a flight attended was serving the meal, leading to the unintentional plunge. Boeing sent an advisory to 787 operators “which included instructions for inspecting and maintaining (cockpit seat) switches” and was “recommending operators perform an inspection at the next maintenance opportunity.”

In May, a Singapore Airlines Boeing 777-300ER on its way from London’s Heathrow Airport to Singapore’s Changi Airport experienced violent turbulence in flight, killing one passenger and injuring dozens of others; the plane landed in Bangkok and was eventually flown back to its home base.

Furthermore, in the last month, two close calls were reported on Southwest Airlines 737s.

In one, a 737 Max entered a dangerous aerodynamic oscillation known as a “Dutch roll” that modern computer software should be able to avert.

In another, a 737-800 passed within 500 feet of a high school during what appeared to be a botched approach to Will Rogers Oklahoma City Airport.

While the latter incident leads more toward suspicion of pilot error of some sort, the former indicated yet another 737 Max with a technical issue — although Boeing chief engineer Howard McKenzie tried to assure Congress during his June 18 testimony that it was a problem unique to the individual aircraft and not germane to the 737 Max.

According to Flight Global, McKenzie said it was a “unique circumstance … that has nothing to do with design or manufacturing” but that needs further investigation.

“We are pulling together the data that we have, and it does not indicate that there is anything that is of fleet concern here,” he said.

Whether there’s something of greater concern, however, will soon be seen.

One thing is for sure, though: A brand once thought to be way too big to fail is crashing to earth, metaphorically and literally.