Boeing is facing international criticism

Boeing is facing international criticism — but could it face criminal charges?

After two deadly plane crashes within six months, aircraft manufacturer Boeing is facing international investigations on its safety regulations — and the question of whether it did enough to prevent lives from being lost.

The investigations come following a Lion Air plane crash, which left 189 dead last October, and an Ethiopian Airlines crash on March 10 that killed 157, including 18 Canadians.
Here’s a look at what consequences the world’s largest plane manufacturer could face.

Criminal charges?

The FBI has joined a criminal probe into Boeing, looking into how the 737 MAX 8 jets were deemed safe. One focus of investigations into Boeing are the company’s relations with the U.S. Federal Aviation Administration.

Earlier this week, reports emerged that the FAA delegated government-required safety inspections to Boeing employees themselves. And the resulting safety report from Boeing, according to the news outlet, contained “several crucial flaws.”


Richard Leblanc, a lawyer who specializes in corporate governance, explained to Global News that investigations into Boeing are in the early stages so it’s difficult to predict whether there will be criminal charges.
“There is a high bar for criminal charges; there actually has to be willful intent,” he explained, noting that as of now, a lot of important information is unknown.

“We certainly can’t rule it out, but the fact that four regulators, including the FBI, are investigating this is not good news for the company.”

Leblanc noted the question investigators will be asking most is, “After the first crash, what steps did Boeing take knowing what it knew to address the software issue sooner rather than later?”

Richard Leblanc, a lawyer who specializes in corporate governance, explained to Global News that investigations into Boeing are in the early stages so it’s difficult to predict whether there will be criminal charges.

“There is a high bar for criminal charges; there actually has to be willful intent,” he explained, noting that as of now, a lot of important information is unknown.

“We certainly can’t rule it out, but the fact that four regulators, including the FBI, are investigating this is not good news for the company.”

“Regulators will begin to ask, should the plane have been recalled after the first crash?” he added.
Investigators will be looking to do things like preserve evidence related to the crashes and emails sent by Boeing executives. They will also supboena documents and conduct interviews.

LeBlanc said the process typically takes six to nine months for investigators to get access to facts and start putting a case together.

Class-action civil lawsuits

Beyond criminal investigations, Boeing is facing several class-action lawsuits from families of the victims involved in the Lion Air crash.

Two new lawsuits were filed in Chicago on Wednesday, according to the Washington Post, claiming Boeing and the U.S. Federal Aviation Administration’s certification process for the planes was not thorough.
Aviation attorney Chuck Hermmann, who filed a class-action lawsuit on behalf of victims’ families, noted that there have been talks of merging Lion Air and Ethiopian Airlines lawsuits.



But he told Global News that it’s complicated, because Lion Air’s flight was domestic within Indonesia and Ethiopian Airlines’ was an international flight — meaning there are different rules and regulations.

“It’s an unusual situation, when you’ve got two different airlines and you’ve Boeing in both of them,” he said. “I think we could do it either way, but it gets a bit on the foggy side when you’ve got different laws applying.”
LeBlanc noted that if Boeing does face criminal charges, that would help solidify these class-action civil lawsuits.

Financial fallout

The world’s entire 737 MAX 8 fleet was grounded after the Ethiopia crash, with Boeing losing about 12 per cent  — or $28 billion — of its market value since the disaster.

   On Friday, Boeing fell further after Indonesia’s flag carrier became the first airline to seek to cancel an order of 737 MAX 8 jets.
The deliveries of nearly 5,000 more — worth well over $500 billion — are also on hold.

Reputation takes a hit

Beyond financial fallout, Boeing’s reputation has taken a serious hit following the crashes. LeBlanc said he expects that to last for at least several months.
  “Customers don’t have confidence in the planes anymore, so that’s a very difficult bar,” he said, noting that’s not something that can be fixed with software updates.

 

Boeing has sought to do damage control amid the widespread criticism. The company shuffled some senior executives recently, according to a company email revealed this week.