Boeing seeks to withdraw guilty plea deal in deadly crashes of 737 MAX jets, WSJ reports

WASHINGTON (Reuters) -Boeing is seeking to withdraw an agreement to plead guilty in a criminal case that blamed the company for deceiving regulators before two deadly crashes of 737 MAX jets, the Wall Street Journal reported on Monday.

A U.S. judge in December rejected the deal, faulting a diversity and inclusion provision, and Boeing and the Justice Department have been negotiating toward a new agreement.

President Donald Trump took over on January 20, giving his administration a chance to weigh in on the deal.

Boeing declined comment. The Justice Department did not immediately comment.

In July, Boeing agreed to plead guilty to a criminal fraud conspiracy charge in the wake of two fatal 737 MAX crashes. The planemaker also agreed to pay a fine of up to $487.2 million and spend $455 million to improve safety and compliance practices over three years of court-supervised probation as part of the deal.

Relatives of the victims of the two 737 MAX crashes, which occurred in 2018 and 2019 and killed 346 people, have called the plea agreement a "sweetheart" deal that failed to adequately hold Boeing accountable for the deaths of their loved ones.

An accepted plea deal would brand Boeing a convicted felon for conspiring to defraud the U.S. Federal Aviation Administration about problematic software affecting the flight control systems in the planes that crashed.

In May, the DOJ found Boeing had violated the terms of a 2021 agreement that had shielded it from prosecution over the crashes. Prosecutors then decided to criminally charge Boeing and negotiate the current plea deal.

The decision followed a January 5, 2024, in-flight blowout of a door panel on an Alaska Airlines' jet that exposed ongoing safety and quality issues at Boeing.

Judge Reed O'Connor in Fort Worth, Texas in 2023 said "Boeing's crime may properly be considered the deadliest corporate crime in U.S. history."

Trump administration officials have said regulators must be firm with Boeing after a series of missteps.

"We need to be tougher on Boeing. We need to be tougher on the industry," said Steve Bradbury, who was confirmed as deputy transportation secretary this month.

Boeing on Friday won a contract to build the U.S. Air Force's most sophisticated fighter jet yet.

(Reporting by David Shepardson and Kanishka Singh in Washington and Allison Lampert in Montreal; Editing by Chris Reese and Stephen Coates)