back to article Boeing will cough up $2.5bn+ to settle US fraud charge over 737 Max safety

Boeing has agreed to settle a criminal charge that it conspired to commit fraud by deceiving federal aviation officials by withholding safety information about its 737 Max control systems. The US Department of Justice on Thursday announced the deferred prosecution deal, which imposes obligations that Boeing must meet over the …

Page:

  1. sanmigueelbeer Silver badge

    WTF: Boeing must acknowledge and accept the government's criminal fraud charge

    Unlike many corporate settlement agreements where the defendant admits no wrongdoing, Boeing must acknowledge and accept the government's criminal fraud charge

    Whao. This is unprecedented. I never saw that comin'.

    It is too bad the FAA could not be sued, fined or penalized.

    1. teknopaul Silver badge

      Re: WTF: Boeing must acknowledge and accept the government's criminal fraud charge

      Good precident for Trump.

    2. John Brown (no body) Silver badge
      Unhappy

      Re: WTF: Boeing must acknowledge and accept the government's criminal fraud charge

      Just saw on the news that a 737 (no idea which variant) has gone "missing" over Indonesia,

    3. Vasten_the_Barelegged

      Re: WTF: Boeing must acknowledge and accept the government's criminal fraud charge

      > It is too bad the FAA could not be sued, fined or penalized.

      And looks like they are still at it, with that bizarre PR stunt when the FAA pilot flew the Max for a while and then held a well-trailed press conference to say he "liked what he saw".

      https://www.npr.org/2020/09/30/918924566/i-like-what-i-see-faa-chief-flies-737-max-but-not-ready-to-recertify-plane

  2. Denarius Silver badge
    Unhappy

    nothing happening here then

    IMHO, until the PHBs responsible feel serious pain, are fired and forbidden to work in aviation, automotive or any safety significant industry again (that eliminates flipping burgers) or are taken outside hangars, shot, mangled and otherwise lose their bonuses, not necessarily in that order, nothing will change Only the shareholders and victims families suffer. Back to making a board member fly coach/economy/lowest price and service seat on any random 737 will do.

    1. Magani
      Unhappy

      Re: nothing happening here then

      Once again, a company (this time, one liable for 346 deaths) has managed to buy its way out of jail.

      As mentioned above by Denarius, until such time as a company's board/CEO/them-wot's-in-charge get put behind bars, nothing will change. Buck-passing and 'too big or complex to find a culprit' should no longer be wildcards that company lawyers can play with impunity.

      Hey, El Reg - where is my 'steam-coming-out-of-ears' icon?

      1. chivo243 Silver badge
        Flame

        Re: nothing happening here then

        Once again, pay your money, say you made a mistake, pass go and collect 200 quatloos anyway, and continue business as usual.

        As close as steam coming out the ears... and I've been asking for new\different icons for a while now.

        1. druck Silver badge
          Mushroom

          Re: nothing happening here then

          This is the icon to use when want the heads of board members on stakes outside the factory to remind everyone of their commitment to safety.

        2. DJO Silver badge

          Re: nothing happening here then

          Ah, but it's not "their money" is it, it's the employees and shareholders money. You can bet the executive remunerations will be increased as usual, with bonuses all round.

          Not only should the people responsible be facing prison time, they should be personally responsible for a proportion of the fine, perhaps raid the directors pension fund as they are always overstuffed anyway.

        3. JohnMurray

          Re: nothing happening here then

          Except we'll pay their fine, as in the flying public we.

          No directors or senior management were harmed, financially or otherwise.

          Maybe one should be kept unmodified and used for management trips?

      2. Red Ted
        FAIL

        Re: nothing happening here then

        The former chief executive Dennis Muilenberg received $62m in additional compensation, despite being almost-but-not-quite-fired. So the risk in it for him for overseeing this mess was what exactly?

    2. Grease Monkey Silver badge

      Re: nothing happening here then

      The certification processes agreed between Boeing and the FAA were clearly flawed. But even though they were flawed Boeing willfully abused those processes to certify the MAX and not just in the area of the MCAS software. Other areas of the aircraft were rubber stamped as passing the certification criteria when they did no such thing.

      As such this action does not go nearly far enough. The courts should examine the certifications made for as long as these arrangements are in place and find how many Boeings do not meet the certification criteria. And fines should be levied for all those too. As well as Boeing being forced to recall and rectify all the affected planes.

      And that still isn't far enough.

      The best way to impact Boeing is to take ALL certification tasks out of their hands and pass them on to the FAA. Remember that the arrangement is the way it is because for the FAA to carry out all certification would have been prohibitively expensive and would have slowed down getting new aircraft certified. So the best penalty would be for the FAA to employ and train new staff to certify Boeing aircraft completely at the expense of Boeing. That's right Boeing should be billed for the recruitment, wages, training and incidental expenses of all these staff.

      Oh and finally while they're at it they should investigate the certification arrangements that the FAA have with other manufacturers just in case.

      1. Pascal Monett Silver badge
        Stop

        But Boeing is already paying employees at the FAA.

        That is the principle reason why this whole fiasco happened. Boeing has people inside the FAA that are paid by Boeing to "streamline" the certification process.

        It got streamlined into the ground.

        Get those people out - they have clearly failed in their duty to the public. Get Boeing out of the FAA - it never should have gotten in in the first place.

        Have the FAA hire new people and train them - at its own expense - and make sure they are trained to never trust Boeing again.

        Remember : the FAA has its share of guilt in this as well. No reason to let them off the hook.

        1. Anonymous Coward
          Anonymous Coward

          What? The FAA deputized Boeing employees for certain functions. They work for Boeing. The FAA doesn't have enough funding to hire enough people which is why the FAA does this at all aircraft manufacturers. That funding is from the US Congress, which has absolved itself for underfunding the FAA.

      2. Nonymous Crowd Nerd

        Re: nothing happening here then

        Plus, there should be a complete ban on revolving door recruitment so not one employee can move from Boeing to the FAA or vice versa.

  3. HildyJ Silver badge
    Boffin

    The software isn't the main problem

    The problem is that to save time and money the 737-Max was presented as an update to the 737-100 airframe. the 50 year old 737-100 airframe. The airframe that requires the plane to be low to the ground to accommodate folding ladders for passengers because airports didn't have jetways.

    As a result, the new engines (which were the main reason for the 737-Max) had to be redesigned and repositioned leading to an instability that the software attempts to correct.

    What needs to change is the certification process. Updating an old airframe should require a new certification.

    See for more details: https://www.latimes.com/local/california/la-fi-boeing-max-design-20190315-story.html

    1. amanfromMars 1 Silver badge

      Re: The software isn't the main problem

      As a result, the new engines (which were the main reason for the 737-Max) had to be redesigned and repositioned leading to an instability that the software attempts to correct. .... HidyJ

      Have all those new redesigned and repositioned engines resulting in an admitted and fully recognised inherent catastrophic flight instability been replaced? Or does the catastrophic deadly weakness still remain with software attempting to correct it?

      Should that be the case, and the aircraft be again given approval and FAA blessing to fly with passengers and freight and aircrew onboard and aloft, is the FAA rather than Boeing then liable to be prosecuted and punitively fined billions in exemplary damages with the question then raised being ......... Who exactly suffers the price and personally pays for wilfully incurring that cost for a well known bad decision that is able to destroy hundreds of innocent lives every time instructions from software to components and processes fails ?

      Is it impossibly hard and much too expensive to simply build an inherently stable flight aircraft?

      American Airlines, which is flying the jets, said, "we’ll provide additional flexibility to ensure our customers can be easily re-accommodated if they prefer not to fly this aircraft type."

      If you believe that accommodation can ever fly, I have a few pigs here to sell you.

      1. druck Silver badge

        Re: The software isn't the main problem

        Have all those new redesigned and repositioned engines resulting in an admitted and fully recognised inherent catastrophic flight instability been replaced? Or does the catastrophic deadly weakness still remain with software attempting to correct it?

        The engine propositioning does not lead to catastrophic instability, it can be dealt with by training the pilots that the MAX has different handling characteristics from previous 737 variants. The catastrophic instability comes from trying to make it handle like previous 737s using buggy software working from a single faulty sensor.

        1. amanfromMars 1 Silver badge

          Re: The software isn't the main problem

          The engine propositioning does not lead to catastrophic instability, it can be dealt with by training the pilots that the MAX has different handling characteristics from previous 737 variants. The catastrophic instability comes from trying to make it handle like previous 737s using buggy software working from a single faulty sensor. ..... druck

          I don't know that knowing presumably complex software, buggy or otherwise, is responsible for flying planes, rather than it being the skills of human aviators, is encouraging and reassuring, druck.

          Such though appears to be very much the same quandary which faces the terrestrial motor vehicle trade too with their autonomous robot driving vehicles ferrying passengers asleep and/or inattentive at the wheel.

          1. Cynic_999 Silver badge

            Re: The software isn't the main problem

            We rely on automation to keep us safe in many areas. When you drive a car your life is often in the hands of the automatic traffic light system. Should a fault cause all lights at a junction to be green at the same time, it may well result in deaths. Airliners have depended on automation for a long time now - whether that is a computer system, an electrically powered system or a hydraulic system. It is simply not possible on a large airliner to have all the controls operated by the pilot's muscle-power as it is with small aircraft. There is arguably a far greater chance that a complex mechanical system will fail than a computer system. And both can have hidden design flaws (bugs).

            In the vast majority of cases, computer systems make the aircraft more safe rather than less safe. Pilots can make random and unexpected mistakes - and the human brain has a surprisingly large number of "software bugs" that are responsible for many serious accidents in all sorts of activities. Computers do not suffer fatigue. They do not have lapses of concentration. They do not get bored performing the same task over and over again. They do not forget to perform vital actions that they have done hundreds of times before. They are not distracted by worries about their family or financial situation. They do not suffer from task fixation or a host of other "human factor" conditions that has resulted in many cases of "pilot error".

            No, computers are far from ensuring 100% safety. But if correctly implemented theyare far safer than a human pilot.

          2. SkippyBing

            Re: The software isn't the main problem

            If you look at the accident rate for airliners since 1945 you'll notice that as automation has increased the accident rate has reduced. Worth noting MCAS isn't needed for the autopilot in the 737 MAX, it's only active when being manually flown.

          3. John Brown (no body) Silver badge

            Re: The software isn't the main problem

            "Such though appears to be very much the same quandary which faces the terrestrial motor vehicle trade too with their autonomous robot driving vehicles ferrying passengers asleep and/or inattentive at the wheel."

            Auto-braking sensors, systems that have been in production and on the road, still don't work properl to the extent that in some cases, roads have been changed to suit the systems rather than the systems being changed to take all situations into account.

            Somerset cattle grid mistaken for wall by car sensors

        2. Chris 15
          FAIL

          Re: The software isn't the main problem

          "The engine propositioning does not lead to catastrophic instability," Yes this flaw (a) can, whilst in certain parts of the flight envelope and certain angles of attack. Hence the MCAS software needing to react more rapidly than the pilots could- at least whilst the software worked as intended...whereas:

          "The catastrophic instability comes from trying to make it handle like previous 737s using buggy software working from a single faulty sensor." is another flaw they then introduced. This flaw (b) was magnified when they increased the MCAS response speed, control authority, and increased ability to reengage (to infinite), due to the earlier implementation of MCAS- the one they sold to the regulator- not being able to react sufficiently to flaw (a)

        3. SkippyBing

          Re: The software isn't the main problem

          'The engine propositioning does not lead to catastrophic instability, it can be dealt with by training the pilots that the MAX has different handling characteristics from previous 737 variants.'

          Not true, the MAX has handling characteristics that mean it cannot be certified for use as an airliner without the MCAS system to correct it. Above around 15 degrees angle of attack the control forces reduce as the angle of attack increases, meaning if the pilot is distracted while manually flying the MAX they can inadvertently enter a stall. MCAS corrects that using the trim. Where training comes in is that to avoid there being too much conversion training, requiring a separate type rating, they just didn't mention the existence of MCAS.

          Nothing to do with making it handle like a 737 NG, all to do with making it handle in a way that would pass certification and then minimising the conversion training by not mentioning how they did it.

          1. Denarius Silver badge

            Re: The software isn't the main problem

            the irony is that Boeing had an aircraft in the capacity /load range that the 737MAX was "extended" to fill. Look up 767. But that stopped being built years ago and required separate pilot training.

          2. Anonymous Coward
            Anonymous Coward

            Re: The software isn't the main problem

            This is not true. At some point the rate of control force increase decreases. At no point does the control force actually decrease. The requirement from the FAA is that for each doubling (example ratio) of angle of attack from the zero force control input (aka trimmed position) the control force should also double (same ratio.) At some point instead of doubling, it increases by 1.8 or some such. I expect this small variation, too large for the arbitrary requirement, was seen as a minor problem leading to a minor fix and lack of concern.

            The main failure was the decision on the MCAS retriggering action. Each time the pilots tapped the trim switch it was used to trigger MCAS to reevaluate; the AoA was still high, so MCAS gave another nudge. Because the pilots at the controls during the crashes never once held the trim switch long enough to unwind the MCAS inputs, those inputs accumulated. At no time was the trim motor unable to put the stabilizer into the correct position; the pilots failed to do so. Panic, inexperience, and poor training caused that failure. Same as crashed PIA 8303.

            1. SkippyBing

              Re: The software isn't the main problem

              I think you're right about how the force changes, I was over simplifying. The problem was that although it was initially a minor fix, it ended up having to be significantly increased, I think the trim movement was about 8 times larger than originally planned. It also inexplicably had full trim authority, which is what led to bad things happening.

              I would disagree that panic and inexperience were to blame, the pilots in the first crash didn't know MCAS existed so they wouldn't have known they had to remove its effects. The pilots in the second crash did know about it, did what Boeing had said would solve the issue, and then found themselves unable to control the aircraft and unable to manually trim it due to aerodynamic forces. Slow round of applause for Boeing introducing an emergency procedure that doesn't solve the problem.

        4. AlbertH

          Re: The software isn't the main problem

          Not quite - the software isn't the problem (though it really didn't help). The problem is the fundamental imbalance in the aircraft due to the re-positioned hardware. The original 737s were beautifully balanced and very stable. These new abominations take a wonderful old design and completely screw around with almost every physical parameter, and then try to compensate for this fundamental instability with a nasty software kludge.

          Several American pilots I know have left the company as they refuse to fly these deathtraps. Others have "gone sick" with "Covid" to avoid flying them......

          Boeing should be forced to scrap every last one of these deadly aircraft, and return to building safe, stable, reliable aircraft like they used to!

    2. Anonymous Coward
      Anonymous Coward

      Re: The software isn't the main problem

      The MAX is an NG variant. The NG was a nearly complete redesign of the Classic and is not a "50 year old airframe." What you mean is that Boeing should build an Airbus aircraft and put itself and Southwest Airlines out of business, because that's what would happen.

      Next up: Fixing the Airbus human factors failure that let PIA 8303 crash because the pilots retracted the landing gear on final approach. I guess they got all confused by the warnings that the gear was up.

  4. Whitter
    Meh

    Other countries

    With their admission of a failure to act on aviation safety, will any other contries consider banning 737s (or even, as it is evidence of a lack of the 'required' company safety culture, all Boeing craft) from their skies? Until of course they also get a bung of cash and sudenly the risk is gone.

    1. sanmigueelbeer Silver badge

      Re: Other countries

      will any other contries consider banning 737s (or even, as it is evidence of a lack of the 'required' company safety culture, all Boeing craft) from their skies

      The People's Republic of China has the clout to do so.

      A few hours after the Ethiopian crash, China's CAA immediately banned all 737MAX flights in China's airspace. And got the ball rolling.

      Japan followed shortly and then EASA/UK CAA on the 12 March 2019. Canada CAA followed on the 13th and then, finally, it took a Presidential Executive Order before FAA issued a grounding.

      If China did not act, 737MAX would still be flying today.

      1. vtcodger Silver badge

        Re: Other countries

        China's motives in grounding the 737MAX, while appropriate, may not have been entirely altruistic. The prototypes of China's competitive offering, the Comac C919, are completing flight tests. The first deliveries may well take place in 2021. On the other hand, the C919 hasn't killed anyone ... so far.

  5. clyde666

    Selling tactics

    Were any of these planes sold with "consultants fees" included?

    Does the court order include reclaiming bribes?

  6. Tom 38 Silver badge

    346 deaths, $500m to the "beneficiaries fund" - is it cynical of me to wonder how much of this will actually get to the bereaved, and how much is going to be skimmed off by lawyers + other "costs"?

    1. teknopaul Silver badge

      Even if they take 50% half a million goes a long way in Ethiopia. Is it cynical of me to think that this number is a lie.

    2. Anonymous Coward
      Anonymous Coward

      Cheap ripoff justice ......... far too late and too little !!!

      Tom38,

      "346 deaths, $500m to the "beneficiaries fund" - is it cynical of me to wonder how much of this will actually get to the bereaved, and how much is going to be skimmed off by lawyers + other "costs"?"

      Not cynical enough !!!! :(

      In a nutshell, it is not enough !!!

      If it was American citizens in a US court, they would be getting 10's of Millions each.

      Cheap justice that lines the pockets of the Lawyers and the US Govt.

      As ever, you don't count if you are not American and expect justice from US courts.

      Shame on Boeing !!!

      1. MotionCompensation

        Re: Cheap ripoff justice ......... far too late and too little !!!

        If my experience as a family member of a victim of a different airplane crash is anything to go by, 40% will go to the lawyers.

    3. Anonymous Coward
      Anonymous Coward

      Cynical?

      Are you being cynical enough? Even the article headline neatly conflates refunds to Boeing's customers and compensation to relatives of the victims. 20% of the headline figure is going into the compensation fund. Less than a quarter. Most of it is refunds to Boeing's customers.

      And if you want your cynicism levels to go off the charts, perhaps you should think about how much else is going to be paid into the compensation fund. More? Less? Absolutely sod-all?

      But the victims were mostly foreign and poor. So airlines get the majority of the money.

    4. Version 1.0 Silver badge

      "$1.77bn has been set aside for Boeing’s 737 Max airline customers" - so they are going to make some money from the crashes?

  7. Chris G Silver badge

    Did no one notice

    That effectively Boeing has put tg blame on to two pilots who failed to reportcertain things to the FAA?

    As usual, buck passing the blame to minions and neglecting to mention who instructed the minions is common place now. What would you call it, the Volkswagen gambit? Althoughthe gambit is far older than that.

    Allowing Boeing to buy off the issue sets a precedent for them that they are too big to fail and that they can throw money at failures to avoid genuine punishment for transgressions.

    Money they are almost guaranteed to recover in government contracts that help them to keep America ahead in commercial and other aviation.

  8. iron Silver badge

    The board of Boeing and the heads of the FAA should be made to log 100 hours each flying on the "fixed" MAX before allowing it back into service.

    1. Anonymous Coward
      Anonymous Coward

      Slight change

      ... should be made to log 100 hours each flying on the "fixed" MAX (with a intermittently faulty AOA sensor) before allowing it back into service.

    2. AlbertH

      The board of Boeing and the heads of the FAA should be made to log 100 hours each flying on the "fixed" MAX before allowing it back into service.

      Nope. They should all be scrapped and the full purchase price and damages should be paid to every airline that bought them.

  9. Ian Johnston Silver badge

    $2.5bn? Wow, that's the price of 20 737 Maxes. They have so far made more than 800.

    1. Cuddles Silver badge

      List price is not profit. They've actually delivered a little over 300 of them. Count the development costs, supposedly as much as $3 billion, and they're very unlikely to have made any profit at all so far. The extra 400 or so that they haven't been allowed to deliver have been actively costing them money. Thats is, after all, the whole reason to rush it through without proper certification in the first place - plane are expensive to design and build, and don't have a huge prodit margin, so there's always a big drive to reduce cost wherever possible and get things delivered to customers as soon as possible.

      An even simpler way to look at it is to ignore all the details and just look at Boeing as a whole. In 2019 they lost over $600 million. In 2020 they weren't able to sell a single one of their shiniest new plane, and in fact had a significantly number of orders withdrawn, and that's before you even start looking at the near collapse of the plane industry due to the pandemic. They've now been fined an additional $2.5 billion. There can really be little question that this is actually a pretty significant hit to their finances.

    2. colinb

      Just to be clear on whether this is money in the bank, it isn't.

      a) Nobody pays list price for planes.

      Ryanair recent order will most likely at least a 50% discount, I'd say probably more than 50% as this is a post disaster vulture purchase, like Ryanair's post 9/11 one. Almost as if they wait for one to come along.

      b) Nobody pays all the money up front, first there is a initial purchase payment, probably around 1%, then there is a staged set of Pre Delivery Payments (PDPs), based on construction milestones, around 3, leading up to the actual delivery where the final payment is made.

  10. hoola Silver badge

    Wheeling and dealing

    What is clear is the Boeing's lawyers have struck a deal that effectively forces them to admit what everyone already accepts and pay some money. Although the money is a largish number, in reality it is not much to a company of that size. That nobody is being prosecuted is the really sad fact. One really does have to wonder if the outcome would have been the same if it were predominantly American lives that had been lost.

    These sorts of outcomes show just how bent the system of regulation and enforcement is. There needed to be some serious personal liability for those at involved in the decision making chain that lead to this. They allowed 346 people to be killed yet, as far as we know, nobody has had any meaning sanction against them. The boss resigning is irrelevant, he will have gone with a nice package, have directorshits elsewhere and has been handsomely reward whilst in that position.

    1. amanfromMars 1 Silver badge
      Mushroom

      Re: Wheeling and dealing

      It's the crazy American Oday way of doing things, hoola, hence their current unfolding and rapidly collapsing predicament ‽ . Throwing fiat paper dollars at anything doesn't simply solve problems whenever others realise the difficulties presented to be exploited. And that is an inherent weakness which is present in all fiat like rewarded promotions and whenever the printing presses are allowed to take over whenever future greater intelligence is missing and/or exhausted.

      It is a valuable lesson well worth any fool learning, given the fact that any denial can very quickly escalate the situation to threaten the systemic fundamental foundations upon which so much may be built and now be discovered to be catastrophically shaky ground with many a fault line exposed to be rightly worried about and wary of, lest certain seemingly unrelated activity elsewhere foreign brings once thought almighty structures crashing down at home.

    2. Martin Gregorie Silver badge

      Re: Wheeling and dealing

      YES! I came here to say something similar.

      Everybody in the chain of command, from CEO down to the managers, accountants and designers who decided that MCAS was a satisfactory solution should be made personally liable for their actions with penalties up to and including culpable homicide as well as being permanently banned from future involvement in any organisation that provides, sells or regulates passenger transport services.

      This is about the only way that similar people in other organisations will get the message.

      To all those working on self-driving systems for surface vehicles: yes, I'm looking at you too.

      1. jtaylor

        Re: Wheeling and dealing

        Everybody in the chain of command, from CEO down to the managers, accountants and designers who decided that MCAS was a satisfactory solution should be made personally liable for their actions

        That's just indiscriminate revenge. Quite a few — probably most — of the people in that organization did not knowingly (and would not willingly) approve such a flawed system. I imagine some who did understand the problem, raised their concerns. And given my own experiences in large organizations, they were likely told something to make them go away. I don't mean just threats, but possibly assurances that engineers were already working on a fix.

        Go ahead and shoot people, but learn how to aim first. You lack understanding of how organizations work. Few people have all the information. And some people act in bad faith, lying, concealing or even bullying those under them.

Page:

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2021