Plane maker’s funding pledge comes as families sue for compensation
By Andrew Tangel
Updated July 3, 2019 12:44 pm ET
Boeing Co. BA 0.08% pledged $100 million in financial support to families and communities affected by two fatal crashes of its 737 MAX plane, as the company works to restore a reputation shaken by the tragedies.
The Chicago-based plane maker said the funds would cover costs including living expenses for families, community development and education efforts.
The move comes while Boeing is in talks to settle legal claims with the families of dozens of victims of the Lion Air crash in waters near Jakarta last October and another fatal MAX accident in Ethiopia in March. The two crashes claimed the lives of all 346 people on the two flights, and led to the global grounding of 737 MAX planes.
“The families and loved ones of those on board have our deepest sympathies, and we hope this initial outreach can help bring them comfort,” Boeing Chief Executive Dennis Muilenburg said Wednesday.
Another Boeing official said the $100 million pledge was “absolutely independent of the lawsuits” and wouldn’t have any bearing on litigation or mediation.
It wasn’t immediately clear how relatives of the MAX crash victims could apply for financial assistance. The Boeing official said the company would work with local governments and nonprofit groups to distribute the funds.
Some lawyers representing victims’ families in civil litigation against the company said the money is a step in the right direction, while others decried it as a publicity stunt and questioned how the $100 million would be spent.
“It doesn’t do anything meaningful for the families and it doesn’t give them the answers they’re looking for,” said Steven Marks, a lawyer at Podhurst Orseck PA in Miami, who is representing families of victims of the Lion Air and Ethiopian Airlines crashes.
Boeing didn’t immediately respond to a request for comment.
Lawyers said the funds won’t stop them from pushing the company for answers through the lawsuits. A judge overseeing lawsuits related to the crash in Ethiopia said last week Boeing must begin turning over documents to plaintiffs in the coming months.
“I don’t believe any of our clients would resolve their cases before more information about the causes of the two tragedies is known and that they know that something of the same nature won’t occur again,” said Justin Green, an attorney in New York with several cases related to the Ethiopia crash.
Boeing had come under fire in the aftermath of the two crashes for appearing to deflect blame and withholding information from airlines and pilots. Executives have stepped up efforts to express sorrow. Last month, Mr. Muilenburg said the company had made mistakes in how it communicated during the crisis.
Boeing faces potential legal costs from the MAX crashes far in excess of Wednesday’s financial commitment. Some analysts estimate settlements with plaintiffs could top $3 billion.
That money would come on top of other costs from the MAX’s global grounding, including potentially several billion dollars in compensation to airlines. Boeing in April said it would take a $1 billion charge against earnings to cover higher plane-production expenses spread over the life of the jetliner program. The figure didn’t include unspecified costs to fix the MAX.
Boeing, a big beneficiary of recent U.S. tax cuts, in 2017 said it planned to use $300 million of the savings for charitable donations and workforce education.