— Accelerates productivity and efficiency within 787 supply chain
— Bolsters Boeing capability to develop and produce large composite structures
— Vought continues relationship with Boeing on range of programs

SEATTLE, July 7, 2009 – The Boeing Company [NYSE: BA] announced today that it has agreed to acquire the business and operations conducted by Vought Aircraft Industries at its South Carolina facility, where Vought builds a key structure for Boeing’s 787 Dreamliner airplane.

The Vought facility, located in North Charleston, performs fabrication, and assembly of structures and systems installation of 787 aft-fuselage sections, which are made primarily of composite materials. After the transaction, Vought will continue its work on many Boeing programs including other components of the 787, as well as structures and components on the 737, 747, 767, 777, C-17, and V-22 through operations located elsewhere.

“Integrating this facility and its talented employees into Boeing will strengthen the 787 program by enabling us to accelerate productivity and efficiency improvements as we move toward production ramp-up,” said Scott Carson, president and CEO of Boeing Commercial Airplanes. “In addition, it will bolster our capability to develop and produce large composite structures that will contribute to the advancement of this critical technology.”

“We take great pride knowing that we have been able to satisfy the technological and physical demands of the 787 program alongside much larger companies, ” said Elmer Doty, president and CEO of Vought Aircraft Industries. “However, the financial demands of this program are clearly growing beyond what a company our size can support. We are pleased that we will continue our 787 involvement at a component
manufacturing level, as well as provide on-going technical capabilities that have helped make Charleston a world-class composite facility.”

Through the agreement, Boeing will acquire, among other things, the facility, assets and inventory as well as assume operation of the site, and the parties will resolve all matters related to Vought’s prior work on the 787 program. The cash consideration to be paid to Vought at closing is approximately $580M. In addition, Boeing will release Vought from its obligations to repay amounts previously advanced by Boeing. Separately, Boeing entered into new agreements with Vought for work packages on the 737, 777 and 787.

This transaction is anticipated to close in the third quarter following satisfaction of customary closing conditions, including consent from Vought’s lenders.
Once acquired, the North Charleston facility will be managed by the 787 Program. “We look forward to welcoming the South Carolina team to Boeing and continuing our relationship with Vought to bring the most value to the 787 and our other programs,” said Carson.

Source: Vought