Kiyoshi Tanno
Boeing (NYSE:BA) is in talks with the U.S. Department of Defense about ways to keep its government contracts after the aviation company agreed to plead guilty to a criminal charge resulting from two fatal crashes of its 737 Max plane, Reuters and Bloomberg News reported Monday, citing people familiar with the matter.
The guilty plea could make the company ineligible for defense contracts, which last year made up about a third of Boeing’s (BA) revenue. It’s not clear how the company and government agencies will resolve the issue, though legal experts said it’s unlikely the company will be banned from aerospace and defense contracts.
The company and the Justice Department on Monday reached a tentative agreement in which Boeing (BA) would plead guilty to criminal conspiracy in connection with the crashes in 2018 and 2019 that killed 346 people. Boeing (BA) would pay a fine and install a corporate monitor for three years as part of the agreement, which requires court approval.
There have been cases in which corporations were allowed to work on defense contracts after pleading guilty to a crime, Bloomberg News reported. The Defense Logistics Agency that supervises the Pentagon’s work with contractors in 2008 determined at Siemens could continue to handle government work though it had pleaded guilty to violating U.S. anti-corruption laws.