Boeing supplier Spirit slashes dividend due to 737 MAX crisis

Spirit AeroSystems Inc, Boeing Co’s largest supplier, said on Friday it would slash its quarterly dividend to just 1 cent per share as it grapples with the grounding of the planemaker’s 737 MAX jets.

“The Company’s Board will consider further action with respect to the dividend in the future, upon the MAX’s return to service and further production stabilization,” Spirit Chief Executive Officer Tom Gentile said in a statement.

Spirit last paid a dividend of 12 cents per share.

Boeing last month halted production of the MAX, which has been grounded for more than 10 months following two fatal crashes that killed 346 people.

Spirit said Boeing will pay the company $225 million in the first quarter of 2020 to support 737 MAX aircraft production, which will gradually restart sometime this year once regulators clear the jet to fly again.

The payment is part of a deal announced with Boeing last month. Spirit plans to deliver 216 shipsets to Boeing in 2020 as part of the deal.

Adding to Spirit’s woes, its chief financial officer, Jose Garcia, resigned last month amid some accounting irregularities.

Spirit, which builds the fuselage, thrust reversers, engine pylons and wing components for the 737 MAX, has said it does not expect the accounting issues to materially affect its financial statements for the year ended Dec. 31.