Spirit AeroSystems has disclosed a $425 million deal with Boeing to tackle issues such as inventory levels and cash flow challenges following the FAA’s production cap on the planemaker’s 737 MAX aircraft.
This agreement, announced by Spirit on Tuesday, coincides with discussions between the two companies regarding Boeing’s potential acquisition of the fuselage supplier, a former subsidiary. It also emerges as Boeing grapples with a crisis stemming from a mid-air panel incident in January involving a new Alaska Airlines 737 MAX 9.
As part of the deal, Spirit will maintain a production rate to meet Boeing’s contractual demands.
Boeing reiterated its commitment to collaborating with Spirit to enhance quality, stabilize operations, and support customers.
Spirit, known for its expertise in manufacturing large aircraft structures, has faced cash flow challenges and quality issues related to the fuselages supplied for Boeing’s 737 narrowbody jets.
In addition to the financial agreement, Spirit will provide Boeing with specified financial updates on a weekly basis.
This deal is expected to assist in navigating reduced deliveries to Boeing following the FAA’s decision to limit the planemaker’s 737 production rate to 38 planes per month. It will also help address the increased factory costs required to maintain production quality and readiness.
Sources: AirGuide Business airguide.info, bing.com, finance.yahoo.com
