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Boeing dedicates $100 million to victims of 737 Max crashes

Boeing will pay out $100 million to help support the f...

Posted: Jul 4, 2019 3:36 AM
Updated: Jul 4, 2019 3:41 AM

Boeing will pay out $100 million to help support the families and communities of people who died in two 737 Max crashes in the last year.

The company said the money will be given to local nonprofits and community groups that will distribute the funds to the relatives of the 346 people who died. The money will be used to support education, including college tuition or other schooling expenses for children of victims, and "hardship or living expenses for impacted families," Boeing said in statement.

The news was not well received by the relatives of victims who have sued the company, according to attorney Bob Clifford, who represents dozens of families affected by the March 2019 crash of a Boeing 737 Max in Ethiopia.

"This type of offer so early in the litigation process is unprecedented," Clifford said in an emailed statement. "Because there is still so much to learn about what occurred, it also appears to be disingenuous."

He criticized Boeing's offer as "vague" and added that the families are less interested in cash than getting their loved ones' remains from the crash site, which so far has been what he called an "tortuously slow" process.

A Boeing spokesperson said that people who accept funds from the $100 million compensation fund will not be required to give up the right to pursue legal action against the company. The spokesperson declined further comment on Boeing's ongoing lawsuits.

"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 families and loved ones of those on board have our deepest sympathies, and we hope this initial outreach can help bring them comfort," said Dennis Muilenburg, Boeing's chairman, president and CEO.

Boeing's 737 Max jets were grounded worldwide in March after one of the aircraft, flown by Ethiopian Airlines, crashed shortly after takeoff. It followed a crash in late 2018 of a 737 Max flown by Indonesian airline Lion Air.

The company is facing multiple lawsuits and federal investigations related to the 737 Max. The grounding has forced airlines to cancel hundreds of flights each week, and it's not clear when the 737 Max, which is Boeing's top-selling plane, will be cleared to fly again.

Boeing has pledged to deliver a software fix to address issues with its automatic safety features that were linked to both crashes. Experts had expected the jets to be back in the air in August — but those efforts were delayed after another potential problem with the 737 Max was discovered during testing, the company said last month.

The company's earnings are expected to suffer at least until it resumes shipping the 737 Max to its airline customers. Boeing said in April that the ordeal has cost the company at least $1 billion, and expenses are expected to pile up as Boeing compensates airlines for the losses sustained by the flight cancellations and delays in receiving new 737 Max deliveries.

Still, Boeing is in a far better position than most companies to ride out the crisis. Its annual revenue topped $100 billion last year, and at the end of March the company had about $7.7 billion in cash on hand. Boeing stock is up nearly 10% so far in 2019.

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