Boeing Stock: Justice Department To Charge Boeing; Dow Giant Said To Reach Spirit Aero Deal
The Justice Department has told Boeing (BA) that it will charge it with fraud, urging the Dow aerospace giant to plead guilty to the criminal charge or risk a trial, according to multiple reports. Meanwhile, Boeing reportedly has agreed to buy supplier Spirit AeroSystems (SPR).
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The floated plea deal would involve a fine as well as an independent monitor for Boeing’s safety and compliance practices. Boeing will have until the end of the week to respond.
A criminal guilty plea could complicate Boeing’s government contracts.
Specifically, the DOJ is accusing Boeing of violating a 2021 settlement after the fatal 737 Max crashes in 2018-2019 that killed 346 people. That deferred-prosecution agreement, forged in the final days of the Trump administration, let Boeing avoid criminal prosecution if it followed certain conditions.
In May, Justice officials concluded that Boeing had failed to live up to that 2021 settlement by failing to implement an effective compliance program to detect and prevent fraud violations.
That followed renewed Boeing safety concerns after part of the fuselage blew off a 737 Max 9 jet during an Alaska Airlines (ALK) flight. Safety investigators determined key bolts were missing, leading to the discovery of other lapses at Boeing and key supplier Spirit AeroSystems.
Boeing Agrees To Buy Spirit AeroSystems
Boeing has agreed to buy Spirit AeroSystems for $37.25 a share, or more than $4 billion, in an all-stock deal, Reuters reported Sunday night. The Dow giant aims to have more control over its supply chain amid recent safety lapses.
Boeing Stock
Boeing stock rose 3.1% last week to 102.01, rallying from a 52-week low in late April. But BA stock is still down 30.2% in 2024, one of the worst performers on the Dow Jones and S&P 500.
Spirit AeroSystems fell 2.1% to 32.87 last week, but after soaring 14.3% in the prior week. SPR stock is up 3.4% in 2024.
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