Boeing to give $425 million advance payments to Spirit

NEW YORK

Boeing is giving subcontractor Spirit Aerosystems $425 million in advance payments so it can maintain production and allow the U.S. aviation giant to fulfill its orders, a regulatory filing has shown.

Boeing has faced intense scrutiny since a near-catastrophic incident in January, when a fuselage panel blew off of a 737 MAX mid-flight.

The incident revived major questions around Boeing's manufacturing and safety practices that had initially arisen following two fatal crashes in 2018 and 2019, but which had subsided following a lengthy grounding of the 737 MAX.

Spirit manufactures fuselages and other large airplane parts, including for Boeing's 737 jets.

Following the Jan. 5 incident, an audit by the U.S. Federal Aviation Administration of Boeing and Spirit found "multiple instances where the companies allegedly failed to comply with manufacturing quality control requirements."

Around the same time, the two companies announced they were in talks for Boeing to buy Spirit.

The deal would return Kansas-based Spirit to Boeing after the larger company spun it off in 2005.

Spirit's recent filing with the U.S. 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."

Under the terms of the agreement, Spirit is to repay Boeing in installments between June 12 and October 16 of this year.

Boeing announced in late March that CEO Dave Calhoun would step down at the end of the year as part of a leadership shakeup.