- Esprit AeroSystems has reached an agreement with Boeing to strengthen its production system.
- The agreement comes after quality issues involving Spirit AeroSystems delayed Boeing deliveries.
- Shares of Spirit AeroSystems jumped more than 20% in intraday trading. Wednesday after the deal was announced.
Shares of Boeing supplier Spirit AeroSystems (SPR) jumped Wednesday after it reached a production deal with Boeing (BA) to support its production system after quality issues delayed Boeing deliveries.
The agreement comes after a series of defects identified earlier this year involving Spirit AeroSystems disrupted and delayed Boeing deliveries, with Boeing warning it could miss its delivery targets for the year.
“Our collective teams will focus on performance and supply chain resilience,” said Patrick M. Shanahan, Boeing Chairman and CEO, noting that “the united effort to synchronize our production systems will enable greater market responsiveness and greater delivery assurance”.
"Boeing and Spirit will continue to work side by side to mitigate today's operational challenges,” Spirit AeroSystems said in announcing the agreement.
Shares of Spirit AeroSystems were up more than 23% as of 3 p.m. . ET Wednesday after the news, while Boeing shares were little changed. However, shares of both companies were still down for the year, with Boeing shares falling nearly 5% and Spirit AeroSystems shares falling nearly 30% year to date.
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