Boeing and Spirit Agree on $425 Million Deal to Address Supplier Issues

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Spirit AeroSystems and Boeing have reached an agreement aimed at addressing challenges faced by Spirit, including inventory levels and cash flow issues, following the U.S. aviation regulator’s decision to limit Boeing’s 737 MAX production. As part of the deal announced by Spirit on Tuesday, Boeing will provide advance payments totaling $425 million to assist Spirit in managing these challenges.

The agreement comes at a crucial time as Boeing considers acquiring Spirit, its former subsidiary, and seeks to manage a crisis triggered by a recent mid-air panel incident involving a new Alaska Airlines 737 MAX 9 aircraft.

Under the terms of the deal, Spirit will maintain a production rate aligned with Boeing’s contractual demand, ensuring continued support for Boeing’s production requirements. Boeing reaffirmed its commitment to collaborating with Spirit to enhance quality, stabilize operations, and uphold customer satisfaction.

In addition to the financial support, Spirit will furnish Boeing with specified financial updates on a weekly basis. This collaboration is expected to help both companies navigate challenges related to reduced deliveries caused by the Federal Aviation Administration’s production rate cap on Boeing’s 737 aircraft and increased factory costs associated with maintaining production quality and readiness.

The agreement underscores a shared commitment between Spirit AeroSystems and Boeing to address operational and financial challenges effectively while ensuring the continued supply of essential aircraft components.