According to a regulatory statement on Tuesday, Boeing is paying subcontractor Spirit Aerosystems $425 million in advance so that it may continue manufacturing and enable the US aviation giant to complete its orders.
Boeing is under tremendous scrutiny following a near-catastrophic event in January when a fuselage panel ripped off of a 737 MAX mid-flight. The company publishes its quarterly profits on Wednesday.
The event reignited serious concerns about Boeing’s safety and manufacturing procedures that had been raised after two deadly disasters in 2018 and 2019, but had previously diminished when the 737 MAX was grounded for an extended period of time.
Spirit produces fuselages and other substantial aircraft components, such as those for Boeing’s 737 aircraft.
The US Federal Aviation Administration audited Spirit and Boeing after the January 5 incident and discovered “multiple instances where the companies allegedly failed to comply with manufacturing quality control requirements.”
The two businesses stated at about the same time that they were in talks for Boeing to acquire Spirit.
Spirit, based in Kansas, was spun off from Boeing in 2005; the acquisition would bring it back to Boeing.
Spirit’s recent filing with the US Securities and Exchange Commission said that advance payments must be used “for the sole purpose of maintaining readiness to produce Products… at the rates required by Boeing.”
Spirit must reimburse Boeing in installments between June 12 and October 16 of this year, under the provisions of the deal.
Boeing responded as follows when AFP contacted them: “We continue to work together with Spirit to improve quality, stabilize operations, and support our customers.”
As part of a leadership transition, Boeing declared in late March that CEO Dave Calhoun will leave the company at the end of the year.
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