On July 18th, a federal judge in Texas<\/a> scheduled what will likely be the final hearing in the case of United States v. The Boeing Company.<\/em> After five years of litigation, the end result can only be described as a victory for Boeing \u2014 and a permanent setback for those who hoped that the company would be held accountable for a decade of safety violations.<\/p>\n<\/div>\n Last year, Boeing\u2019s prospects looked far bleaker. In 2021, the Department of Justice charged the company with conspiracy to defraud<\/a> the government about the Maneuvering Characteristics Augmentation System (MCAS) software on the 737 MAX, which has been linked to the deaths of 346 people in the crashes of Lion Air 610 and Ethiopian Airlines 302. (The Verge<\/em><\/a> first covered this story in 2019.)<\/p>\n<\/div>\n After years of legal maneuvering, the company agreed to plead guilty to the conspiracy charge in July 2024<\/a> in order to avoid a criminal trial. Under the plea bargain\u2019s terms, Boeing would pay nearly $2.5 billion to airlines, families of crash victims, and the government, plus accept three years of monitoring from an independent safety consultant. That agreement was thrown out<\/a> by a federal judge in December, and a trial date was set for June 2025<\/a>.<\/p>\n<\/div>\n If convicted, Boeing would not be able to simply pay its way out of trouble. As a corporate felon, the company would have to permanently accept increased<\/a> government<\/a> scrutiny over every part of its business<\/a> \u2014 a return to a regulatory model that Congress repealed in 2005<\/a>, after significant lobbying<\/a> by the aviation<\/a> and defense<\/a> industries. According to one legal think tank<\/a>, United States v. Boeing<\/em> had the potential to be one of the most significant corporate compliance judgments in decades.<\/p>\n<\/div>\n Photo: Olivier Douliery\/AFP via Getty Images<\/cite><\/p>\n<\/div>\n<\/div>\n<\/div>\n But then Donald Trump returned to the White House. Many of Trump\u2019s strongest political allies have benefited from significant changes in policy under the new administration: the crypto industry<\/a>, industrial polluters<\/a>, and Elon Musk<\/a>, to name a few. Boeing has spent a considerable amount of money building a relationship with Trump, too. It donated $1 million to his inauguration fund<\/a>, and its CEO accompanied Trump on his recent trip to Qatar<\/a>.<\/p>\n<\/div>\n Its payout came last May, when the head of the DOJ\u2019s Criminal Division, Matthew Galeotti, announced a change<\/a> of enforcement strategy. Galeotti directed his division to no longer pursue \u201coverboard and unchecked corporate and white-collar enforcement [that] burdens U.S. businesses and harms U.S. interests.\u201d Instead, he wanted it to focus on a narrower set of crimes, including terrorism, tariff-dodging, drug trafficking, and \u201cChinese Money Laundering Organizations.\u201d<\/p>\n<\/div>\n \u201cNot all corporate misconduct warrants federal criminal prosecution,\u201d the memo stated. \u201cIt is critical to American prosperity to acknowledge \u2026companies that are willing to learn from their mistakes.\u201d<\/p>\n<\/div>\n Boeing has spent a considerable amount of money building a relationship with Trump.<\/p>\n<\/div>\n<\/div>\n Two weeks later, the DOJ agreed to drop the charges against Boeing completely<\/a>. Instead of pleading guilty, Boeing would now just be liable for a reduced monetary penalty of around $1.2 billion: $235 million in new fines, plus $445 million into a fund for the families of the 737 MAX crash victims. It would also have to invest $455 million to enhance its \u201ccompliance and safety programs,\u201d part of which would pay for an \u201cindependent compliance consultant\u201d for two years of oversight. It avoided a felony charge, and more importantly, it was allowed to continue self-auditing<\/a> its own products.<\/p>\n<\/div>\n The DOJ\u2019s rationale for the change was that it expects companies to be \u201cwilling to learn from [their] mistakes.\u201d This is not a skill that Boeing seems to possess.<\/p>\n<\/div>\n The company makes plenty of mistakes. Its 737 MAX has been plagued by computer errors that go far beyond MCAS<\/a>. Its strategy of outsourcing production to third-party suppliers has been a consistent source of manufacturing errors and delays<\/a> for almost a decade. Its lack of investment in quality control in its factories have caused new airplanes to be delivered with a variety of severe defects: excessive gaps<\/a> in airplane fuselages, metal debris near critical wiring bundles<\/a> or inside fuel tanks<\/a>, and door plugs installed without security bolts. The latter issue led to the explosive decompression of Alaska Airlines 1282<\/a> in January 2024, an incident that went viral<\/a> thanks to the dramatic passenger video<\/a> taken from inside the cabin.<\/p>\n<\/div>\n But Boeing does not seem to be able to learn from its mistakes. According to the DOJ, Boeing has known all of this and has still \u201cfail[ed] to design, implement, and enforce a compliance and ethics program.\u201d Although the company has brought on two new CEOs in the last six years, each <\/a>of whom<\/a> promised to clean things up, Boeing\u2019s core culture still remains \u2014 which is the root cause of all of its technical problems.<\/p>\n<\/div>\n The DOJ\u2019s rationale for the change was that it expects companies to be \u201cwilling to learn from [their] mistakes.\u201d This is not a skill that Boeing seems to possess. <\/p>\n<\/div>\n<\/div>\n As I wrote in my book about the 737 MAX crashes<\/a>, Boeing is so large and so firmly entrenched as one of the world\u2019s two major commercial airplane makers that it is functionally immune from the market\u2019s invisible hand. It is so strategically and economically important<\/a> that it will always get bailed out, even in the face of a global crisis such as the COVID-19 pandemic. And it makes so much money every year that even the multibillion-dollar fines that the DOJ is willing to impose amount to just a small portion of its annual revenues.<\/p>\n<\/div>\n \u201cBoeing became too big to fail,\u201d former FTC chair Lina Khan said in a 2024 speech<\/a>. \u201cWorse quality is one of the harms that most economists expect from monopolization, because firms that face little competition have limited incentive to improve their products.\u201d<\/p>\n<\/div>\n If regulators won\u2019t step in and force Boeing to change, then it will continue to prioritize profits over safety \u2014 the only rational choice in a consequence-free environment. This might be a good bargain for its shareholders, but not for passengers.<\/p>\n<\/div>\n![\"US-AVIATION-EARNINGS-BOEING\"](\"https:\/\/platform.theverge.com\/wp-content\/uploads\/sites\/2\/chorus\/uploads\/chorus_asset\/file\/22220639\/1211275409.jpg?quality=90&strip=all&crop=0%2C0.9623636140738%2C100%2C98.075272771852&w=2400\"\/)
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