(Reuters) – Spirit AeroSystems (NYSE:) said Boeing (NYSE:) would give the company upfront payments of $425 million and help it address issues such as higher inventory levels and lower cash flows after the U.S. aviation regulator suspended the airline’s 737 MAX production aircraft manufacturer had limited.
The deal announced by Spirit on Tuesday comes amid talks between the two to acquire the fuselage supplier, a former subsidiary, and as the planemaker tries to gain control of a wide-ranging crisis sparked by a panel blowout in the air in January on a new plane. Alaska Airlines 737 MAX9.
Under the deal, Spirit will maintain a production rate that supports Boeing’s contractual production demand.
Boeing said it continues to work with Spirit to improve quality, stabilize operations and support our customers.
Spirit, one of the industry’s largest manufacturers of large aircraft structures, has struggled in recent quarters with cash flow problems and quality issues surrounding the fuselages it makes for Boeing’s 737 narrowbody jets.
Spirit will also provide Boeing with itemized financial information on a weekly basis.
The deal would also help lower expected deliveries to Boeing due to the Federal Aviation Administration’s decision to limit the planemaker’s 737 production rate to 38 planes per month and higher factory costs to maintain speed readiness and production quality.
