Spirit AeroSystems has renegotiated its long-term contracts with Boeing. Under the revised terms of what currently still is a Memorandum of Agreement, Boeing will pay Spirit more for each 787 shipset but will get a price reduction for 737 and MAX shipsets. Boeing will also provide $100 million in new funding for tooling and capital, Spirit said in a stock exchange filing on Wednesday.
The Memorandum of Agreement follows after Spirit’s top management raised concerns this summer that continued forward losses on the existing contracts with Boeing and Airbus are no longer sustainable. Then-CEO Tom Gentile said in August during the HY1 results earnings call that the aircraft OEMs and the US government have to recognize that the environment has changed and terms and conditions of the times they were agreed are no longer valid. Criticism of Gentile for what was perceived as his failing to promptly address the issue is seen as a factor why he stepped down as CEO with immediate effect on October 3, although he stays on in an advisory role.
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