Spirit Aerosystems to Get $425 Million in Advance Payments From Boeing Under New Deal

By Ben Glickman

Boeing will make $425 million in advance payments to Spirit Aerosystems, a push to keep Spirit production ready despite fewer plane deliveries as Boeing faces tougher regulatory scrutiny.

Spirit said in a regulatory filing Tuesday that the agreement between the two companies was meant to address a drop in production and higher factory costs, among other factors.

Spirit will maintain a production rate that supports Boeing's contractual demand under the deal. In exchange, Boeing will pay Spirit $425 million in three payments due in the next several weeks, advances on the companies' long-term supply agreements.

As part of the deal, Spirit said it can only use the advance payments to stay ready to produce planes for Boeing as needed. The manufacturer will have to pay back the advance later in the year on a specified schedule.

The deal is also meant to address Spirit's high inventory levels and lower cash flows from operations.

The company said it would have higher factory costs in order to stay ready to produce, partially because of improvements to product-quality verification processes and regulatory limits on Boeing increasing production.

Write to Ben Glickman at ben.glickman@wsj.com

(END) Dow Jones Newswires

April 23, 2024 16:42 ET (20:42 GMT)

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