Boeing Co. is offering $100 million to support the families of victims and others affected by two crashes of its 737 Max jetliner, which killed 346 people and have led to scores of lawsuits.
The money will go toward "education, hardship and living expenses for impacted families, community programs and economic development in impacted communities," Boeing said Wednesday in a statement. The funds would be committed over several years.
The pledge -- described as an "initial outreach" -- underscores the high stakes for Boeing as it navigates one of the worst crises in its 103-year history. The Chicago-based plane-maker has come under scrutiny from wary passengers, investors, customers and regulators after a pair of fatal crashes prompted the grounding of its marquee Max jet family.
Settling lawsuits on behalf of victims could cost Boeing about $1 billion, Bloomberg Intelligence estimated, although legal experts have said payouts could be higher if evidence shows that Boeing knew about flaws in the planes before the disasters.
"We at Boeing are sorry for the tragic loss of lives in both of these accidents, and these lives lost will continue to weigh heavily on our hearts and on our minds for years to come," the chief executive of Boeing, Dennis Muilenburg, said in a statement. "The families and loved ones of those on board have our deepest sympathies, and we hope this initial outreach can help bring them comfort."
Robert Clifford, a Chicago lawyer who has filed suit on behalf of 23 victims in the second crash, called the new offer by Boeing "highly unusual." He noted that such pledges of assistance after a crash often come with stipulations or limits.
"All you can really say about it is, the devil is in the details," Clifford said. "Tell me how it works. Tell what the details of the claiming process will be. Who is the universe of beneficiaries?"
Boeing plans to work with local governments and nonprofit organizations to deploy the funds. The total averages about $289,000 per crash victim, although the amount any person receives could be far less once payments are made to all entities. The company isn't placing restrictions related to litigation over how the money can be used, said spokesman Charles Bickers.
"It's absolutely independent from the lawsuits by the families," Bickers said. "It's a constructive step that we can take right now."
Boeing has struggled to contain the fallout over the accidents, which began in October when a Max jet operated by Lion Air plunged into the Java Sea.
Some families of the victims of Lion Air Flight 610, which crashed after taking off from Indonesia, were pressured to sign settlement agreements that barred them from suing Lion Air or Boeing.
After the Ethiopian Airlines Flight 302 crashed in Ethiopia on March 10 under similar circumstances, regulators worldwide moved to ground the plane. In both incidents, Boeing's design of a system designed to prevent aerodynamic stalls has been implicated.
Civil and congressional inquiries have been opened into the design and certification of the plane. The cause for each accident hasn't been concluded.
At least 46 claims have been filed by families of victims in the Indonesia crash, with almost as many for the Ethiopian fatalities, court records show. The cases are in the early stages.
Some family members of victims have been critical of Boeing in the aftermath of the crashes and have attended congressional hearings and met with officials at the Federal Aviation Administration and the National Transportation Safety Board.
"We wanted to be assured that everything within the power of these agencies that can be done is being done to ensure the future safety of these planes," Nadia Milleron, mother of victim Samya Stumo, said in a June 11 release after meeting aviation officials in Washington. Milleron is the niece of consumer advocate Ralph Nader, who has lobbied to permanently remove the plane from service.
Muilenburg said the company is developing software to address a new safety issue on the Max revealed last week. In a video posted to his Twitter account, the CEO said the company was placing a strong emphasis on safety and would "take the time necessary to make these updates."
The grounding of the planes has caused the three carriers in the United States that fly the Max -- American Airlines, United Airlines and Southwest Airlines -- to cancel flights into September and October. The airlines have already canceled thousands of flights and incurred significant costs related to storing and maintaining their grounded jets. They are expecting compensation from Boeing.
The grounding is creating other financial challenges. Boeing continues to produce the Max at a reduced rate. The finished planes cannot be delivered, however, and are being stockpiled in Seattle, taking a toll on Boeing's revenue.
"We know every person who steps aboard one of our airplanes places their trust in us," Muilenburg said. "We are focused on re-earning that trust and confidence from our customers and the flying public in the months ahead."
Information for this article was contributed by Richard Clough, Alan Levin and Janan Hanna of Bloomberg News and by David Gelles of The New York Times.
Business on 07/04/2019
Print Headline: Boeing offers $100M for people affected by 2 jetliner crashes