ARLINGTON, Va. (AP) — Boeing announced plans to acquire key supplier Spirit AeroSystems for $4.7 billion, a move that it says will improve plane quality and safety amid increasing scrutiny by Congress, airlines and the Department of Justice.
Boeing previously owned Spirit, and the purchase 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.
“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 President and CEO Dave Calhoun said in a statement late Sunday.
Concerns about safety came to a head after the Jan. 5 blowout of a panel on an Alaska Airlines 737 Max 9 at 16,000 feet (4,876 meters) over Oregon. The Federal Aviation Administration soon after announced increased oversight of Boeing and Spirit, which supplied the fuselage for the plane.
No one was seriously injured in the Alaska Airlines door incident, which terrified passengers, but Boeing is under pressure from the U.S. Justice Department to plead guilty to criminal fraud in connection with two deadly plane crashes involving its 737 Max jetliners more than five years ago.
Boeing has until the end of the week to accept or reject the offer, which includes the giant aerospace company agreeing to an independent monitor who would oversee its compliance with anti-fraud laws, according to several people who heard federal prosecutors detail a proposed offer Sunday.
The Justice Department said in a May court filing that Boeing violated terms of a 2021 settlement allowing the company to avoid prosecution for actions leading up to the crashes in Ethiopia and Indonesia, which killed 346 people.
Those crashes were blamed on a faulty sensor in a flight-control system and the investigation is separate from the probe of the more recent Alaska Airlines blowout, which involved Spirit.
Boeing spun off Spirit, which is based in Wichita, Kansas, and not related to Spirit Airlines, in 2005. In recent years, quality problems have mounted, including fuselage panels that didn’t fit together precisely enough and holes that were improperly drilled.
Spirit removed its CEO in October and replaced him with Patrick Shanahan, a former Boeing executive who served as acting defense secretary in the Trump administration.
Things seemed to be going more smoothly until the Alaska Airlines incident. Investigators said a panel used in place of an extra emergency door had been removed at a Boeing factory to let Spirit workers fix damaged rivets, and bolts that help hold the panel in place were missing after the repair job. It is not clear who removed the bolts and failed to put them back.
Spirit said in May that it was laying off about 450 workers at its Wichita plant because of a production slowdown since the January incident. Its total workforce was just over 13,000 people.
“Bringing Spirit and Boeing together will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems,” Shanahan said.
The 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, the aerospace company said.
Boeing common stock will be exchanged for Spirit shares according to a variable formula that depends on a weighted average of the share price over a 15-trading-day period ending on the second day before the deal closes, Boeing said.
The companies also announced an agreement with Airbus to negotiate the purchase of Spirit assets involved with programs operated by the European aerospace firm. The Airbus agreement is set to commence when Boeing's acquisition of Spirit is completed, the two U.S. companies said.
Shares of both companies rose by more than 3% Monday.
FILE - The Spirit AeroSystems sign is pictured, July 25, 2013, in Wichita, Kan. Boeing announced plans late Sunday, June 30, 2024, to acquire Spirit AeroSystems for $4.7 billion in an all-stock transaction for the manufacturing firm. (Mike Hutmacher/The Wichita Eagle via AP, File)
FILE - The Boeing logo is pictured Jan. 25, 2011, on the property in El Segundo, Calif. Boeing announced plans late Sunday, June 30, 2024, to acquire Spirit AeroSystems for $4.7 billion in an all-stock transaction for the manufacturing firm. (AP Photo/Reed Saxon, File)
FILE - A Boeing 737 Max jet prepares to land at Boeing Field following a test flight in Seattle, Sept. 30, 2020. Boeing announced plans late Sunday, June 30, 2024, to acquire Spirit AeroSystems for $4.7 billion in an all-stock transaction for the manufacturing firm. (AP Photo/Elaine Thompson, File)
CAMBRIDGE, Mass. (AP) — Post a comment on Reddit, answer coding questions on Stack Overflow, edit a Wikipedia entry or share a baby photo on your public Facebook or Instagram feed and you are also helping to train the next generation of artificial intelligence.
Not everyone is OK with that — especially as the same online forums where they've spent years contributing are increasingly flooded with AI-generated commentary mimicking what real humans might say.
Some longtime users have tried to delete their past contributions or rewrite them into gibberish, but the protests haven't had much effect. A handful of governments — including Brazil's privacy regulator on Tuesday — have also tried to step in.
“A more significant portion of the population just kind of feels helpless,” said Reddit volunteer moderator Sarah Gilbert, who also studies online communities at Cornell University. “There’s nowhere to go except just completely going offline or not contributing in ways that bring value to them and value to others.”
Platforms are responding — with mixed results. Take Stack Overflow, the popular hub for computer programming tips. First, it banned ChatGPT-written responses due to frequent errors, but now it's partnering with AI chatbot developers and has punished some of its own users who tried to erase their past contributions in protest.
It’s one of a number of social media platforms grappling with user wariness — and occasional revolts — as they try to adapt to the changes brought by generative AI.
Software developer Andy Rotering of Bloomington, Minnesota, has used Stack Overflow daily for 15 years and said he worries the company “could be inadvertently hurting its greatest resource” — the community of contributors who’ve donated time to help other programmers.
“Keeping contributors incentivized to provide commentary should be paramount,” he said.
Stack Overflow CEO Prashanth Chandrasekar said the company is trying to balance rising demand for instant chatbot-generated coding assistance with the desire for a community “knowledge base” where people still want to post and “get recognized” for what they've contributed.
“Fast forward five years — there’s going to be all sorts of machine-generated content on the web," he said in an interview. "There’s going to be very few places where there’s truly authentic, original human thought. And we’re one of those places."
Chandrasekar readily describes Stack Overflow's challenges as like one of the “case studies” he learned about at Harvard Business School, of a how a business survives — or doesn't — after a disruptive technological change.
For more than a decade, users typically landed on Stack Overflow after typing a coding question in Google, and then found the answer, copied and pasted it. The answers they were most likely to see came from volunteers who'd built up points measuring their credibility — which in some cases could help land them a job.
Now programmers can simply ask an AI chatbot — some of which are already trained on everything ever posted to Stack Overflow — and it can instantly spit out an answer.
ChatGPT's debut in late 2022 threatened to put Stack Overflow out of business. So Chandrasekar carved out a special 40-person team at the company to race out the launch of its own specialized AI chatbot, called Overflow AI. Then, the company made deals with Google and ChatGPT maker OpenAI, enabling the AI developers to tap into Stack Overflow's question-and-answer archive to further improve their AI large language models.
That kind of strategy makes sense but may have come too late, said Maria Roche, an assistant professor at Harvard Business School. “I’m surprised that Stack Overflow wasn’t working on this earlier," she said.
When some Stack Overflow users tried to delete their past comments after the Open AI partnership was announced, the company responded by suspending their accounts due to terms that make all contributions “perpetually and irrevocably licensed to Stack Overflow."
“We quickly addressed it and said, ‘Look, that’s not acceptable behavior’,” said Chandrasekar, describing the protesters as a small minority in the “low hundreds” of the platform's 100 million users.
Brazil’s national data protection authority on Tuesday took action to ban social media giant Meta Platforms from training its AI models on the Facebook and Instagram posts of Brazilians. It established a daily fine of 50,000 reais ($8,820) for non-compliance.
Meta in a statement called it a “step backwards for innovation” and said it has been more transparent than many industry counterparts doing similar AI training on public content, and that its practices comply with Brazilian laws.
Meta has also encountered resistance in Europe, where it recently put on hold its plans to start feeding people’s public posts into training AI systems — which was supposed to start last week. In the U.S., where there's no national law protecting online privacy, such training is already likely happening.
“The vast majority of people just have no idea that their data is being used,” Gilbert said.
Reddit has taken a different approach — partnering with AI developers like OpenAI and Google while also making clear that content can't be taken in bulk without the platform’s approval by commercial entities “with no regard for user rights or privacy.” The deals helped bring Reddit the money it needed to debut on Wall Street in March, with investors pushing the value of the company close to $9 billion seconds after it began trading on the New York Stock Exchange.
Reddit hasn't tried to punish users who protested — nor could it easily do so given how much say voluntary moderators have on what happens in their specialty forums known as subreddits. But what worries Gilbert, who helps moderate the “AskHistorians” subreddit, is the increasing flow of AI-generated commentary that moderators must decide whether to allow or ban.
“People come to Reddit because they want to talk to people, they don’t want to talk to bots,” Gilbert said. “There’s apps where they can talk to bots if they want to. But historically Reddit has been for connecting with humans.”
She said it's ironic that the AI-generated content threatening Reddit was sourced on the comments of millions of human Redditors, and “there’s a real risk that eventually it could end up pushing people out.”
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Associated Press writer Eléonore Hughes in Rio de Janeiro contributed to this report.
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The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP’s text archives.
Stack Overflow CEO Prashanth Chandrasekar poses on May 21, 2024, in Cambridge, Mass. Chandrasekar said the company is trying to balance rising demand for instant chatbot-generated coding assistance with the desire for a community "knowledge base" where people still want to post and "get recognized" for what they've contributed. (AP Photo/Matt O'Brien)
