Boeing directors agree to $237.5 million settlement over 737 MAX safety oversight -Breaking
By David Shepardson
WASHINGTON/SEATTLE -Boeing Co former and current directors have agreed to a settlement of $237.5 Million with shareholders. This is in response to a lawsuit regarding safety oversight for the 737 MAX, according documents obtained by Reuters.
Boeing (NYSE): After two deadly 737 MAX crashes that claimed 346 lives in 2018,-19, Boeing (NYSE 🙂 grounded its best-selling plane for 20 months. The company had made substantial software and training upgrades which resulted in it being returned to service.
Boeing has confirmed the agreement filed at Delaware Chancery Court on Friday. The proposal will mandate that an additional board director be appointed within one calendar year with experience in product safety oversight, aviation/aerospace or engineering.
The proposal states that Boeing would require its board to always include at least three people with safety experience.
The settlement would require Boeing to amend its bylaws and to remove the Board Chairperson from the CEO position. It also creates for five years a program for an ombudsperson to assist Boeing employees who are responsible for airplane certification for the Federal Aviation Administration. This will allow them to raise concerns about their work.
Boeing will also be required to publish annual public reports about safety-related enhancements that it has made since the MAX plane disasters.
In the documents, it is shown that Boeing insurance will be paying the financial penalty. The document also shows that there may have been up to $29.7million in legal expenses and fees for shareholders.
The settlement stipulates that Boeing’s former and current directors will not admit to wrongdoing, but they will state they were doing what was best for Boeing and the stockholders.
A Delaware court ruled in September that Boeing stockholders may pursue certain claims against it. They claimed the initial 737 MAX collision was a “red alert” regarding a safety mechanism known as MCAS, which “the board should have heeded rather than ignored.”
Boeing lost approximately $20 billion in the crash. Boeing reached a bilateral deferred prosecution deal with the U.S. Department of Justice, which included $2.5 billion in penalties and compensatory payments arising from the 737 MAX crash.
Boeing agreed to the settlement, stating that it had taken “significant actions to strengthen and reinforce our commitment to safety in aviation” after the crash.
It added that the settlement “builds upon those actions with additional oversight reforms and governance reforms which will further improve safety and quality in what we do.”
Boeing has recently added Retired Lieutenant General Stayce Harris (who is a former pilot on Boeing planes) to its board. David Joyce was the leader of GE Aviation between 2009 and 2020.
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