Spirit AeroSystems signs MOA for long-term agreement with Boeing

Lauren Eldershaw
By Lauren Eldershaw December 31, 2018 11:58

Spirit AeroSystems signs MOA for long-term agreement with Boeing

Spirit AeroSystems has executed a Memorandum of Agreement (MOA) with Boeing that establishes pricing terms for certain programs including the 737NG, 737 MAX, 767, 777 freighters and 777-9, and the 787 Dreamliner well into the next decade. The agreement also sets Boeing 737 pricing based on production rates above and below current production levels, and includes investments for tooling and capital for certain Boeing 737 rate increases. Also covered are joint cost reduction programs for the Boeing 777X and 787 Dreamliner; Boeing’s agreement to provide consent to the Company’s acquisition of S.R.I.F. N.V., the parent company of Asco Industries, N.V.; and the release of liability and claims asserted by both companies related to Boeing 737 disruption activity and other matters.

Prior agreements between Boeing and Spirit have memorialized a cost reduction program with respect to the Boeing 737 and pricing for the Boeing 747 and 777 models.

“This agreement further strengthens the long-standing partnership between Boeing and Spirit as it removes uncertainty well into the next decade. The agreement establishes pricing and capital investment for a range of potential production rate increases on the 737 program. With the new agreement, we expect price to exceed cost eventually on the 787 program. We are excited to continue to build on our relationship and look forward to future opportunities with our largest customer,” said Spirit President and CEO Tom Gentile. “With this agreement, we maintain our target of 7 to 9 percent conversion of revenue to free cash flow.”

Lauren Eldershaw
By Lauren Eldershaw December 31, 2018 11:58