Well folks, the biggest aviation manufacturer in the world is now pleading guilty to criminal fraud conspiracy. 

Yup, Boeing is officially entering the hall of corporate felons. Why? Because they misled the Federal Aviation Administration (FAA) before the two tragic 737 MAX crashes. It turns out, they are in fact, NOT proud of their safety record.

(Source:CNBC)

Boeing’s CEO is admitting their shady actions led to those deadly crashes at the end of the last decade. Now, they might have to pay fines soaring up to $487.2 million. But here’s the kicker—they could get away with paying only $243.6 million because they’ve already forked over some cash.

On top of that, Boeing will be under the watchful eye of a corporate babysitter for the next three years and has to spend $455 million to boost their safety and compliance game.

But let’s not get ahead of ourselves. The plea deal isn’t finalized until a judge gives the thumbs-up, and the families of the crash victims are ready to fight it. They think the deal is way too lenient… and can you blame them considering Boeing’s current market cap is $117 billion?

If the judge rejects the deal, Boeing and the Justice Department will have to go back to square one or face a trial, which would air all of Boeing’s dirty laundry for the world to see.

And here's another curveball: a criminal conviction could mess with Boeing’s ability to land contracts with Uncle Sam and the federal government. This is a big deal considering the government is the #1 customer.

Boeing’s legal rollercoaster started back in 2021 when the Justice Department gave them a pass after the two 737 MAX crashes in 2018 and 2019, which tragically killed 346 people. Boeing promised to clean up its act and improve safety protocols. But just when they thought they were in the clear, a new safety issue popped up on an Alaska Airlines Boeing 737 MAX 9. The Justice Department decided it was time for Boeing to face the music.

Boeing’s problems go deeper than these crashes. The company’s troubles began when they shifted focus from engineering excellence to financial performance. This started in 2005 when Boeing sold its Wichita manufacturing operations to improve financial metrics—a move designed more to make Wall Street happy than to ensure long-term stability.

Thanks to Wall Street’s obsession with short-term gains, Boeing started prioritizing stock buybacks and dividends over investing in new airliners. Since 2010, Boeing has funneled $68 billion into shareholder returns. This financial juggling act led to layoffs, outsourcing, and a dip in morale. The once-mighty engineering titan now seemed more concerned with quarterly earnings than with building the safest planes in the sky. Imagine that? Corporate greed strikes again.

As Boeing navigates this storm, the outcome of the plea deal will be crucial. The deal is expected to be finalized by July 19. If the judge rejects it, Boeing and the government will have to renegotiate, or the government could move forward with new charges.

And the stock? You would think it would be plunging in price based on all the evidence right?

Well somehow it’s up 3% at the time of this writing.

Stock.News does not have positions in companies mentioned.