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Boeing, Airbus announce plans to buy parts of subcontractor Spirit AeroSystems
Boeing announced plans to acquire Spirit AeroSystems for $4.7 billion in an all-stock transaction. Spirit is part of the aerospace giant’s supply chain.
Boeing, located in Arlington, Virginia, announced the purchase in a statement early Monday. Spirit is headquartered in Wichita, Kansas.
At about the same time, European aerospace giant Airbus said it had entered into an agreement to buy “major activities related to Airbus” from Spirit.
Under intentions laid out in the announcements, Boeing would take over most of Spirit’s operations.
Spirit builds fuselages and other significant parts for both Boeing and Airbus.
The Airbus agreement is set to commence when Boeing’s acquisition of Spirit is completed, the two U.S. companies said.
The Boeing acquisition’s equity value of $4.7 billion is $37.25 per share, while the total value of the deal is around $8.3 billion, which includes Spirit’s last reported net debt, Boeing said.
Airbus said it would “be compensated by payment of $559 million” from Spirit “for a nominal consideration of $1.00, subject to adjustments including based on the final transaction perimeter.”
Boeing on why it’s making the move
Boeing President and CEO Dave Calhoun said in the company’s statement that, “We believe this deal is in the best interest of the flying public, our airline customers, the employees of Spirit and Boeing, our shareholders and the country more broadly.”
Boeing previously owned Spirit, and Boeing said bringing the supplier back into the Boeing fold would improve plane quality and safety, which have come under increasing scrutiny by regulators, Congress and airlines.
“By reintegrating Spirit, we can fully align our commercial production systems, including our Safety and Quality Management Systems, and our workforce to the same priorities, incentives and outcomes – centered on safety and quality,” Calhoun said.
The purchase of Spirit would reverse a longtime Boeing strategy of outsourcing key work on its passenger planes. That approach has been criticized as problems at Spirit disrupted production and delivery of popular Boeing jetliners, including 737s and 787s.
Concerns about safety came to a head after the Jan. 5 blowout of a panel on an Alaska 737 Max 9 at 16,000 feet over Oregon. The Federal Aviation Administration soon after announced increased oversight of Boeing and Spirit.
Plea deal for Boeing?
Separately, the Justice Department on Sunday presented Boeing with a plea deal after it accused Boeing of violating the terms of a 2021 deferred prosecution agreement that was put in place following two 737 Max crashes in 2018 and 2019.
The department told Boeing it could plead guilty or go to trial, people familiar with the talks confirmed to CBS News. The agreement would have the company plead guilty to the conspiracy charge it originally faced in 2021. In exchange, Boeing would pay a fine and enter a three-year probationary period, the people said.
The DOJ outlined the deal in a presentation to family members of the 737 Max crash victims earlier Sunday before presenting it to Boeing.
News of the plea deal was first reported by Reuters.
If Boeing agrees, a judge would have to sign off on the accord.
But Paul Cassell, an attorney who represents 15 of the victims’ families, told CBS News the proposal was “another sweetheart plea deal” and said the families will “strenuously object” to the deal.
Titanium parts a concern
On another safety front, the FAA said in June it is investigating how titanium parts that were sold with falsified quality documentation were used in the construction of Boeing and Airbus passenger jets in recent years.
Boeing and Airbus said the planes with the falsely documented parts are safe to fly, but Boeing said it would remove affected parts from planes that had not yet shipped to airline customers.
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Tropical Storm Sara makes landfall in Belize after drenching Honduras
Tropical Storm Sara made landfall in Belize on Sunday as forecasters expect heavy rain to cause life-threatening flash flooding and mudslides.
The storm made landfall near Dangriga, about 55 miles southeast of the capital Belmopan, the Miami-based National Hurricane Center said.
This comes after Sara drenched the northern coast of Honduras, where it stalled since Friday, swelling rivers and trapping people at home.
One death was reported Saturday morning by Honduras Emergency Management, who also said that there have been at least 90 rescues and over 47,000 people affected by the storm.
The Hurricane Center’s tropical storm warning as of Sunday included Honduras’ Bay Islands as well as the country’s northern coast from Punta Castilla to its border with Guatemala; the Caribbean coast of Guatemala; Belize’s coast and northward into the coast of Mexico’s state of Quintana Roo, from Chetumal to Puerto Costa Maya.
The storm, which is moving at 6 mph, will continue to move inland over the Yucatan Peninsula and could drop up to 10 inches of rain across the area, with localized totals reaching 15 inches, through early next week. The conditions “will result in areas of flash flooding, perhaps significant, along with the potential of mudslides,” according to the Hurricane Center.
“A storm surge could raise water levels by as much as 1 to 3 feet above ground level near and to the north of where the center of Sara crosses the coast of Belize,” the center said Sunday. “Near the coast, the surge will be accompanied by large and destructive waves.”
Sara is the 18th named storm of the 2024 Atlantic Hurricane Season, which officially runs from June 1 until Nov. 30, with activity typically peaking between mid-August and mid-October. An average season brings 14 named storms, seven hurricanes, and three major hurricanes, according to the National Oceanic and Atmospheric Administration, which did predict the 2024 season would produce “above average” numbers.
CBS News
Gold pocket watch given to captain who rescued Titanic survivors sells for record price
A gold pocket watch given to the ship captain who rescued 700 survivors from the Titanic sold at auction for nearly $2 million, setting a record for memorabilia from the ship wreck.
The 18-carat Tiffany & Co. watch was given by three women survivors to Capt. Arthur Rostron for diverting his passenger ship, the RMS Carpathia, to save them and others after the Titanic struck an iceberg and sank in the north Atlantic on its maiden voyage in 1912.
Auctioneers Henry Aldridge and Son, who sold the watch to a private collector in the United States on Saturday for 1.56 million British pounds, said it’s the most paid-for piece of Titanic memorabilia. The price includes taxes and fees paid by the buyer.
The watch was given to Rostron by the widow of John Jacob Astor, the richest man to die in the disaster and the widows of two other wealthy businessmen who went down with the ship.
Astor’s pocket watch, which was on his body when it was recovered seven days after the ship sank, had previously set the record for the highest price paid for a Titanic keepsake, fetching nearly $1.5 million (1.17 million pounds) from the same auction house in April.
Auctioneer Andrew Aldridge said the fact that Titanic memorabilia has set two records this year demonstrates the enduring fascination with the story and the value of the dwindling supply and high demand for ship artifacts.
“Every man, woman and child had a story to tell, and those stories are told over a century later through the memorabilia,” he said.
Rostron was hailed a hero for his actions the night the Titanic sank and his crew was recognized for their bravery.
The Carpathia was sailing from New York to the Mediterranean Sea when a radio operator heard a distress call from the Titanic in the early hours of April 15, 1912 and woke Rostron in his cabin. He turned his boat around and headed at full steam toward the doomed vessel, navigating through icebergs to get there.
By the time the Carpathia arrived, the Titanic had sunk and 1,500 people perished. But the crew located 20 lifeboats and rescued more than 700 passengers and took them back to New York.
Rostron was awarded the U.S. Congressional Gold Medal by President William Howard Taft and was later knighted by King George V.
Madeleine Astor, who had been helped into a lifeboat by her husband, presented the watch to Rostron at a luncheon at her mansion on Fifth Avenue in New York.
The inscription says it was given “with the heartfelt gratitude and appreciation of three survivors.” It lists Mrs. John B. Thayer and Mrs. George D. Widener alongside Astor’s married name.
“It was presented principally in gratitude for Rostron’s bravery in saving those lives,” Aldridge said. “Without Mr. Rostron, those 700 people wouldn’t have made it.”
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