
The US Department of Justice is said to be offering a new deal to Boeing that would charge the company with fraud but that would likely not result in anyone going to jail. The deal is said to involve Boeing paying a fine, face a three-year term of probation, and work under a corporate monitor.
The deal has angered families of the 346 victims of two plane crashes involving the company’s 737 MAX aircraft. They called it a “sweetheart” deal. “The memory of 346 innocents killed by Boeing demands more justice than this,” said Paul Cassell, who represents the families of 15 crash victims. Erin Applebaum, another attorney acting for relatives of those lost, attacked the proposal as “shameful” and said it “completely fails to mention or recognise the dignity” of the victims.
The two crashes of Boeing’s 737 Max, in October 2018 and March 2019, killed 346 people. It prompted the worldwide grounding of the jet for almost two years. In 2021, the justice department and Boeing reached a controversial deal that protected the company from a criminal conspiracy charge to commit fraud that arose from the two crashes.
Earlier this year, however – as the company came under intense scrutiny after a brand-new 737 Max jet was forced into an emergency landing when a cabin panel blew off mid-flight – the justice department said Boeing had breached this agreement.
Boeing to acquire Spirit AeroSystems
Meanwhile, Boeing announced it has entered into a definitive agreement to acquire troubled Spirit AeroSystems, which makes fuselages for Boeing and also makes structures for Airbus. The deal is an all-stock transaction at an equity value of approximately $4.7 billion, or $37.25 per share. The total transaction value is approximately $8.3 billion, including Spirit’s last reported net debt.
Boeing is acquiring Spirit in order to exert more control over the company’s products. Spirit has suffered multiple safety problems with its products that have in turn affected Boeing’s production capabilities.
“We believe this deal is in the best interest of the flying public, our airline customers, the employees of Spirit and Boeing, our shareholders and the country more broadly,” said Boeing President and CEO Dave Calhoun. “By reintegrating Spirit, we can fully align our commercial production systems, including our Safety and Quality Management Systems, and our workforce to the same priorities, incentives and outcomes – centred on safety and quality.”
Boeing’s acquisition of Spirit will include substantially all Boeing-related commercial operations, as well as additional commercial, defence and aftermarket operations. As part of the transaction, Boeing will work with Spirit to ensure the continuity of operations supporting Spirit’s customers and programs it acquires, including working with the US Department of Defence and Spirit defence customers regarding defence and security missions.
Airbus said it has entered into a binding term sheet agreement with Spirit AeroSystems in relation to a potential acquisition of major activities related to Airbus, notably the production of A350 fuselage sections in Kinston, North Carolina, U.S., and St. Nazaire, France; of the A220’s wings and mid-fuselage in Belfast, Northern Ireland, and Casablanca, Morocco; as well as of the A220 pylons in Wichita, Kansas, U.S.
With this agreement, Airbus aims to ensure stability of supply for its commercial aircraft programmes through a more sustainable way forward, both operationally and financially, for the various Airbus work packages that Spirit AeroSystems is responsible for today.
The transaction would cover the acquisition of these activities. Airbus will be compensated by payment of $559 million from Spirit AeroSystems, for a nominal consideration of $1.00, subject to adjustments including based on the final transaction perimeter.