Boeing Makes $100 mn Pledge for 737 MAX Crash Support

The move appears to be a step toward repairing the image of the world's largest planemaker, which has been severely dented by the crash of an Ethiopian Airlines plane in March just five months after a similar crash of a Lion Air flight in Indonesia.

The two crashes killed a total of 346 people.

Boeing is the target of a U.S. Department of Justice criminal investigation into the development of the 737 MAX, regulatory probes and more than 100 lawsuits by victims' families.

The multiyear payout is independent of the lawsuits and would have no impact on litigation, a Boeing spokesman said.

The $100 million, which is less than the list price of a 737 MAX 8, is meant to help with education and living expenses and to spur economic development in affected communities, Boeing said. It did not specify which authorities or organizations would receive the money.

Many of the passengers on board the Ethiopian Airlines flight were aid workers or involved with health, food, or environmental programs.

"If the money is spent on furthering the work of the people on that airplane it would be money well spent," said Justin Green, a New York-based attorney representing several of the Ethiopia crash victims.

But he said the fund would not affect his clients' courtroom strategy: "What families really want to know is why this happened. Could this have been avoided?"

Anton Sahadi, a representative of relatives of the Lion Air crash victims, said the families appreciated the $100 million fund but it did not mean they would stop lawsuits.

"We will continue to fight for our rights in the courts," he said. "Boeing is doing this to build their image back."

Charm Offensive

After the Lion Air crash on Oct. 29, Boeing started developing a software fix on a stall-prevention system called MCAS believed to have played a role in that disaster, as well as in the Ethiopian crash.

The 737 MAX was grounded worldwide after the second crash and regulators must approve the fix and new pilot training before the jets can fly again.

But just last month, regulators identified a new problem that will delay the commercial flight for the jets until October at the earliest.

Boeing is in settlement talks over the Lion Air litigation and has separately offered to negotiate with families of Ethiopian Airlines victims, but some families have said they are not ready to settle, exposing the planemaker to a lengthy court battle.

"The Boeing brand is worth far more than $100 million and the board and executive leadership understand that is what is at stake," said William Klepper, a Columbia Business School professor.

Following an initial response that public relations experts criticized as stilted and lawyer-driven, Boeing has been on a charm offensive, with executives at the Paris Airshow last month repeatedly apologizing for the loss of life. Boeing Chief Executive Officer Dennis Muilenburg posts regular Twitter updates on efforts to safely return the 737 MAX to service and win back public confidence.

Robert Clifford, a Chicago-based attorney with several of the Ethiopian crash cases, suggested some of Boeing's $100 million pledge could be spent assisting efforts to return the remains of victims to their families.

"These families are distraught about the effort to get back their loved ones," Clifford said. "They want closure."

Boeing has also offered to match any employee donations in support of the families and communities impacted by the accidents through December.

REUTERS