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Boeing and DOJ Seek Extension for Revised Plea Deal
AInvestFriday, Jan 3, 2025 2:30 pm ET
4min read
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Boeing and the U.S. Justice Department (DOJ) have requested an extension to provide an update on their progress in reaching a revised plea deal, as the original agreement was rejected by a U.S. judge in December 2024. The companies aim to reach a new agreement by February 16, 2025, according to a joint filing made on January 4, 2025.

The original plea deal, reached in July 2021, included a fine of up to $487.2 million and a three-year probation period under the supervision of an independent monitor. However, U.S. District Judge Reed O'Connor rejected the deal, citing concerns about a diversity and inclusion provision that he argued was not directly related to the criminal fraud conspiracy charge that Boeing pleaded guilty to.



The revised plea deal is expected to address the judge's concerns and potentially include a modified fine and probation period. The families of the victims of the 737 Max crashes play a significant role in the ongoing negotiations, as they have been critical of the initial plea deal, arguing that the fine is not severe enough for Boeing's misconduct. The families have also been pushing for a more transparent and accountable process, which could lead to a more comprehensive investigation and potentially harsher penalties for Boeing.

The ongoing strike by Boeing employees, which began on September 13, 2024, has significantly impacted the company's financial situation and its ability to negotiate a revised plea deal with the DOJ. The strike has added $1 billion in losses every month to Boeing's bottom line, according to credit rating agency Standard & Poor's. This financial strain may limit Boeing's ability to negotiate a more favorable plea deal, as the company may be more inclined to accept a deal that includes a lower fine or more lenient terms to avoid further financial strain.



The severity of the fine and the duration of probation will significantly influence investor confidence in Boeing. A fine that is seen as insufficient or a probation period that is too short could lead investors to question whether Boeing is taking its misconduct seriously and committed to making meaningful changes. Conversely, a fine that is seen as appropriate and a probation period that is long enough to demonstrate a commitment to change could help restore investor confidence in the company.

In conclusion, Boeing and the DOJ are working to reach a revised plea deal that addresses the concerns raised by the U.S. judge and the families of the victims of the 737 Max crashes. The ongoing strike by Boeing employees has exacerbated the company's financial situation, which may limit its ability to negotiate a more favorable plea deal. The severity of the fine and the duration of probation will significantly influence investor confidence in Boeing, as investors will be closely watching the company's actions and the penalties it faces.
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