Spirit AeroSystems to Slowly Restart Production of 737 MAX Parts

Spirit AeroSystems will slowly restart production of parts for Boeing's 737 MAX jetliner.
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Spirit AeroSystems (SPR) - Get Report said Thursday it will slowly restart production of parts for Boeing's (BA) - Get Report troubled 737 MAX jetliner.

Boeing's biggest supplier said in a statement that it reached an agreement with Boeing in which it will restart production slowly, ramping up deliveries throughout the year to reach a total of 216 MAX shipsets delivered to Boeing in 2020.

A shipset is the necessary quantity of a group of products to be used on the production and assembly of one aircraft.

The 737 MAX has been grounded since March 2019 following two deadly crashes that killed a total of 346 people.

Spirit AeroSystems said it doesn't expect to achieve a production rate of 52 shipsets per month until late 2022, adding that "the parties are continuing to negotiate other terms."

"The rate agreement is based on several assumptions including Boeing's expected production rate and the successful return of the 737 MAX to service," the statement said. "As previously disclosed, the 737 MAX contractual agreement is a requirements contract between Boeing and Spirit and the rate may change at any time."

Earlier this month, Spirit AeroSystems said it planned to lay off more than 20% of the workforce in Wichita in response to fallout from the grounding of the MAX. The company also said it would lay off workers later this month at its plants in Tulsa and McAlester, Oklahoma, which also produce components for the MAX.

Thursday's statement didn't refer to the status of the layoffs. Spirit AeroSystems didn't immediately return a call for comment.

Meanwhile, Bloomberg reported that Boeing has received orders of about $14 billion for a loan that the plane maker expects will help it weather the fallout from the grounding of its 737 MAX jet.