Raphael Stevens

Boeing said in March that it was in talks to acquire fuselage maker Spirit AeroSystems.
The deal comes after a big leadership shake-up at Boeing and a midflight door panel blowout that sparked a fresh safety crisis.
Both Spirit and Boeing have struggled to stamp out manufacturing flaws on Boeing’s top-selling plane.

Boeing Co. 737 fuselage sections sit on the assembly floor at Spirit AeroSystems in Wichita, Kansas.
Daniel Acker | Bloomberg | Getty Images

Boeing said Monday that it will buy back its struggling fuselage maker Spirit AeroSystems in an all-stock deal that the plane maker has said will improve safety and quality control.
It said it agreed to pay $37.25 a share in Boeing stock for Spirit, giving the aerospace company an equity value of $4.7 billion. Including Spirit’s debt the deal has a transaction value of $8.3 billion Boeing said. Spirit’s shares closed Friday at $32.87 a share, giving it a market capitalization of about $3.8 billion.

Boeing in March disclosed it was in talks to acquire the Wichita, Kansas-based company, weeks after a fuselage panel blew out midair from a nearly new Boeing 737 Max 9 on an Alaska Airlines flight, sparking a fresh crisis for Boeing. Spirit makes the fuselages for the 737 and other parts, including sections of Boeing’s 787 Dreamliners.
In 2005, Boeing spun off operations in Kansas and Oklahoma that became the present-day Spirit AeroSystems. Boeing accounted for about 70% of Spirit’s revenue last year, while roughly a quarter came from making parts for Boeing’s main rival, Airbus, according to a securities filing.
Boeing CEO Dave Calhoun, who has said he will step down at the end of the year, on Monday said bringing Spirit in-house will “fully align” the companies’ production systems and workforces.
“Among the many actions we’re taking as a company, this is one of the most significant in demonstrating our unwavering commitment to strengthen quality and make certain that Boeing is the company the world needs it to be,” Calhoun said in a message to employees.
He said he expects the deal to close mid-2025, subject to approval by regulators, Spirit shareholders and the sale of Spirit’s operations dedicated to Airbus planes.

Spirit’s CEO, Pat Shanahan, is considered a possible successor for Calhoun.
Airbus, meanwhile, said Monday it has reached an agreement with Spirit so that the European aircraft manufacturer is compensated $559 million by Spirit to acquire its manufacturing lines dedicated to Airbus planes. Those include operations in Belfast, Northern Ireland, where the wings and mid-fuselage of the A220 are produced, A220 pylons in Wichita and A350 fuselage sections in North Carolina.

Mounting pressure

A preliminary report from the National Transportation Safety Board into the Alaska Airlines incident on Jan. 5 said it appeared the bolts that hold the door plug in place weren’t attached to the Max 9 when it left Boeing’s factory and was handed over to Alaska Airlines months prior.
That was the most serious of a host of production problems on Boeing planes, which also included Spirit-made fuselages that had misdrilled holes and misconnected fuselage panels. One way Boeing has tried to improve quality is to accept only fuselages without defects so that repairs or additional manufacturing steps won’t have to be made out of sequence, reducing the chances of errors.
The broader safety crisis stemming from the door plug blowout on the Alaska flight has slowed Boeing’s deliveries of new planes to airlines, and has driven financial hits for both Spirit and Boeing. Boeing’s CFO in May said the company would burn, rather than generate cash this year — about $8 billion in the first half of 2024.
Boeing’s shares are down more than 30% this year.

The Federal Aviation Administration has said it won’t let Boeing expand production until it is satisfied with its production lines.
Calhoun was skewered by lawmakers in a June Senate hearing over the company’s safety record and what some senators lamented as a lack of improvement in the wake of two deadly Max crashes.

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U.S. prosecutors plan to seek a guilty plea from Boeing for misleading a federal regulator in the development of the 737 Max.
The flight-control system Boeing included was later implicated in to fatal 737 Max crashes that killed 346 people.
The Justice Department had said in May, months after a door panel blew out of a new Max 9, that Boeing violated an earlier settlement for failing to implement a certain compliance program.

The fuselage plug area of Alaska Airlines Flight 1282 Boeing 737-9 MAX, which was forced to make an emergency landing with a gap in the fuselage, is seen during its investigation by the National Transportation Safety Board (NTSB) in Portland, Oregon, U.S. January 7, 2024.
NTSB | Via Reuters

U.S. prosecutors plan to seek a guilty plea from Boeing over a charge tied to two fatal crashes of 737 Max planes, attorneys for the victims’ family members said Sunday, blasting a potential agreement as a “sweetheart deal.”
Justice Department attorneys and victims’ family members and their lawyers spoke for about two hours on Sunday, discussing the plan, lawyers said.

Boeing declined to comment, and it wasn’t immediately clear if it would accept a plea deal. A guilty plea could complicate its ability to get government contracts. Boeing is a major defense contractor.
The Justice Department didn’t immediately respond to a request for comment.
The DOJ said in May that it was reviewing whether Boeing violated a 2021 settlement that protected the company from federal charges tied to the 2018 and 2019 crashes of its best-selling 737 Max planes, which killed all 346 people on the two flights. Under that agreement, Boeing said it would pay $2.5 billion.
The DOJ revisited the agreement after a door panel blew out of a new 737 Max 9 midair during an Alaska Airlines flight in January, sparking a new safety and quality control crisis for one of the world’s two suppliers of large commercial airplanes. The so-called deferred prosecution agreement was set to expire days before the door panel blew out.
Boeing admitted in 2021 that two of its pilots defrauded the Federal Aviation Administration by concealing its addition of a new flight-control system to the planes before they were flown commercially. That system was later implicated in the two crashes.
The plea deal would require Boeing to pay an additional fine of about $247 million and call for the installation of an outside monitor on Boeing, according to Paul Cassell, one of the lawyers. Cassell called the new deal a “slap on the wrist.” More

Disney and Pixar’s “Inside Out 2” is the newest member of the billion-dollar club.
The animated feature is the highest-grossing film of 2024 and the first film since Warner Bros.’ “Barbie” to top $1 billion at the global box office.
Before “Inside Out 2,” no Disney animated feature from Pixar or its Walt Disney Animation studio had generated more than $480 million at the global box office since 2019.

Amy Poehler and Maya Hawke voice Joy and Anxiety, respectively, in Disney and Pixar’s “Inside Out 2.”
Disney | Pixar

Disney and Pixar’s “Inside Out 2” is the newest member of the billion-dollar club.
The animated feature has tallied $1.014 billion worldwide as of Sunday, making it the highest-grossing film of 2024 and the first film since Warner Bros.′ “Barbie” to top $1 billion at the global box office.

“On behalf of movie theatre owners across the country and around the world, we want to congratulate Disney’s ‘Inside Out 2’ for grossing $1 billion faster than any animated movie in history,” said Michael O’Leary, president and CEO of the National Association of Theatre Owners. “The film’s stunning global success once again illustrates that audiences the world over will respond to compelling, entertaining movies, and that they want to enjoy them on the big screen.”
The billion-dollar benchmark is a much-needed win for Disney’s Pixar animation hub. A once prolifically successful studio, Pixar has suffered at the box office in the wake of the pandemic. Much of its difficulties have come, in part, because Disney opted to debut a handful of animated features directly on streaming service Disney+ during theatrical closures and even once cinemas had reopened.
As a result, before “Inside Out 2,” no Disney animated feature from Pixar or its Walt Disney Animation studio had generated more than $480 million at the global box office since 2019.
“Inside Out 2” has also showcased how vital the family audience is to the box office. This underserved crowd accounted for more than 70% of those in attendance during the film’s domestic debut, according to data from EntTelligence.
While this audience came out in droves for Universal’s “The Super Mario Bros. Movie,” which generated more than $1.36 billion at the global box office, there was little for them to feast on until the recent releases of Sony’s “The Garfield Movie” and Paramount’s “IF.”

“Inside Out 2” also drove the coveted teen demographic to cinemas, with 14% of foot traffic coming from those aged 13 to 17. This younger generation has been largely absent from the market in recent years.
As the future of moviegoing, this group is particularly important to the industry. Getting them back to the big screen has become a top priority for studios and movie theater operators.
Next up for family and teens is Universal and Illumination’s “Despicable Me 4,” due out in theaters during the July Fourth holiday weekend.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. More

At a time when the box office is starved for content and audiences seem pickier than ever, Fathom Events is posting record revenue gains.
The joint venture between AMC, Regal and Cinemark has been best known for bringing alternative content to the big screen in the form of classic Hollywood titles, live telecasts of theater and opera productions and concerts.
Its value proposition is twofold: It breathes new life into older films, and into theaters.

Still from 2009’s “Coraline.”
Focus Features | Universal

At a time when the box office is starved for content and audiences seem pickier than ever, Fathom Events is posting record revenue gains.
For 20 years, the joint venture between AMC, Regal and Cinemark has been best known for bringing alternative content to the big screen in the form of classic Hollywood titles, live telecasts of theater and opera productions, concerts and even television series.

Most recently, it ventured into the specialty distribution space to deliver “The Blind,” “The Chosen,” “Jesus Thirsts” and “Waitress: the Musical” to audiences. Still to come is “The Journey: A Music Special from Andrea Bocelli.”
In 2023, Fathom generated $100 million at the box office, a 116% increase over 2019 levels and its highest-grossing year ever. And that momentum has continued into 2024, as the company tallied $43 million in the first quarter, up nearly 140% compared to the $18 million it tallied in the year-earlier period.
Fathom’s relationships with Hollywood’s biggest studios and its cinematic reach — as the partnership of the industry’s three biggest theater chains — has made it a formidable force at the box office. Its value proposition is twofold: It breathes new life into older films, and into theaters.
“Falling mostly under the event film banner, anniversary titles have truly come into vogue seemingly more so now than in years past with a particular emphasis given to these beloved older films,” said Paul Dergarabedian, senior media analyst at Comscore. “These anniversary re-releases are a win-win, providing joy to movie fans and notably additional revenues to movie theaters often decades after initial theatrical run.”
In post-pandemic times, Fathom has acted as a crutch for many smaller cinema operators, providing much-needed content for the big screen amid a drought caused by pandemic and strike-related production shutdowns. 

Season 4 of “The Chosen,” a faith-based television show about the life of Jesus, generated $32 million at the box office for Fathom, around 75% of its first-quarter haul. 
“‘The Chosen’ was through [Fathom], and it was huge for us,” said Brock Bagby, president and chief content, programming and development officer at B&B Theatres. “It gave us a lot of extra revenue in February and the beginning of March that we wouldn’t have had.”
Fathom has also benefited from its anniversary titles and classic cinema showings. Each year, the company brings films back to theaters to celebrate milestone years alongside fan-favorite titles. 
“We’ve seen that there’s a growing segment in the box office, people that are interested in seeing older films on the big screen,” said Jordan Hohman, vice president of project development at Phoenix Theatres. “These audiences are getting to enjoy classic films, either for the first time or for the first time, in a new way. I think that that’s valuable.”
This year, the company celebrated the 85th anniversaries of “The Wizard of Oz” and “Gone with the Wind” as well as the 35th anniversary of “Steel Magnolias.” Still on the calendar is the 50th anniversary of “Blazing Saddles,” the 70th anniversary of Alfred Hitchcock’s “Rear Window,” the 40th anniversary of “Neverending Story” and the 20th anniversary of “Mean Girls.”
It also has a film series called Studio Ghibli Fest, which features all 14 films from the studio in their original Japanese and English dubbed versions. This year, the lineup boasts the 20th anniversary of “Howl’s Moving Castle,” the 25th anniversary of “Kiki’s Delivery Service” and the 30th anniversary of “Pom Poko.” 
And these titles can generate big box-office hauls even decades after they were first released. 
Fathom’s three-weekend run of the original Lord of the Rings trilogy resulted in $8.2 million at the box office. 
“Lord of the Rings was wildly successful nationwide, and for us,” Bagby said. “We just did 4DX Lord of the Rings this weekend in our new Dallas theater, and we sold out every single show.”
4DX is a screen format that utilizes motion seats, practical effects and sensory elements to immerse viewers in a movie experience.
Audiences are already buying tickets for showings in August celebrating the 15th anniversary of “Coraline,” which will be shown widely in 3D for the first time since its original release.
Fathom re-released “Coraline” twice before with great success. In 2022, the film showed in 800 theaters for one day and tallied $1.2 million in ticket sales. Last year, the film extended its release to five days and snared $7.1 million, making it the highest-grossing classic film release in Fathom history.
That $7.1 million figure is about 10% of the initial domestic run for “Coraline” in 2009 and 42% of its opening weekend, according to data from Comscore.
What’s more, 53% of the audience who attended screenings of the film last year were 34 years old or younger.
“New audiences are seeing it for the first time although the film is 15 years old,” said Ray Nutt, CEO of Fathom Events.
Fathom reports presales for this year’s screenings of “Coraline” are selling seven times as many tickets per location as were sold during the same period last year, with two-thirds of those ticket sales for the 3D version of the film.
Because Fathom has a wide footprint through its parent companies and nationwide marketing, it does the heavy lifting for smaller theater chains. 
“[Fathom has] built a lot of relationships,” Phoenix Theatre’s Hohman said. “They worked out the licensing and they created the marketing behind re-releasing these classic films that, you know, we just can’t do ourselves. It’s a national campaign. So, I think that they just offer a lot of value.”

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Companies have tread lightly this Pride month, as they brace for a divisive presidential election and are mindful of conservative public backlash against Target and Bud Light.
Tractor Supply on Thursday said it would end all spending tied to diversity and environmental causes, including no longer sponsoring Pride festivals.
But nonprofit advocacy group GLAAD CEO Sarah Kate Ellis said she’s seeing more companies get involved in year-round philanthropy and activism instead of just flying rainbow flags during Pride month.

Parade participants are seen marching during the 2024 Kentuckiana Pride Parade on June 15, 2024 in Louisville, Kentucky. 
Stephen J. Cohen | Getty Images

Pride month is winding down — and this year, the corporate world took a more cautious approach.
June tends to bring a wave of rainbow-themed merchandise and affirming ads and social media posts from retailers and consumers brands, coinciding with parades and other events that celebrate the LGBTQ+ community.

As the presidential election approaches, however, some companies have grown quieter about diversity, equity and inclusion efforts to avoid stepping into the culture wars or facing the blowback from conservative customers that Target and Bud Light did a year ago.
The starkest example of that came late Thursday: Tractor Supply, a retailer that sells animal feed, cowboy boots and lawn supplies in rural parts of the country, said it is ending all spending tied to diversity and environmental causes. That includes no longer sponsoring Pride festivals, the statement said.
The move, while an outlier in its magnitude, underscores how some companies that made inclusion commitments in recent years are treading cautiously.
It is difficult to track how many companies shared supportive messages, donated to LGBTQ+ causes or sold rainbow-themed merchandise in June compared to previous years. According to Gravity Research, a Washington, D.C.-based reputational research firm, 45% of Fortune 100 companies had at least one social media post on LinkedIn or X explicitly related to Pride as of June 21 this year, compared with 51% last June.
Gravity Research President Luke Hartig said the volatility of the presidential election and the two candidates’ willingness to call out companies by name has also made companies less likely to go public about their stand.

“There’s a little bit of like, ‘keep our heads down while we go through this election,'” he said.
Tim Bennett, cofounder of Tribury Productions, a marketing company that specializes in reaching LGBTQ+ Americans, works with Fortune 500 companies, including recent projects with Procter & Gamble. He said more clients have taken “a wait-and-see” approach to marketing to LGBTQ+ consumers or decided to scatter efforts throughout the year instead of making a big splash in a single month.
“June this year has not been like the last five or six,” Bennett said.
That may not be a bad thing for LGBTQ+ initiatives and charities. Sarah Kate Ellis, CEO of nonprofit advocacy group GLAAD, said she’s seeing more companies get involved with year-round philanthropy and activism in more meaningful ways.
She also pointed to a survey by Gravity Research that found that 78% of companies did not plan to change their Pride strategy this year. Thirteen percent were unsure whether they’d make changes and 9% said they planned to revise their strategy. Gravity Research surveyed 45 corporate executives and Fortune 500 leaders across industries in April.
“The visibility of companies putting flags out and having product to celebrate our Pride and to mark a month that’s really significant and important for our community is really important, and I don’t want to ever devalue that,” Ellis said. “I do think, though, those companies must look inside and make sure that they have the policies and the HR practices that match their outward marketing.”
Major companies are still writing checks for LGBTQ+ causes, too. A GLAAD spokesperson said Friday that the group has not seen donations or corporate support decline this Pride month, though it does not yet have a total tally.
On Friday, when the Stonewall National Monument Visitor Center officially opened its doors to commemorate the New York City bar that was a catalyst in the LGBTQ+ rights movement, the event had major backing from the business community. Supporters included Google, Amazon, JPMorgan Chase and Booking.com.
President Joe Biden also made an appearance and remarks at the monument’s opening.

Pride Month merchandise is displayed at a Target store on May 31, 2023 in San Francisco, California. 
Justin Sullivan | Getty Images

The Bud Light and Target effect

Consumer staples brands were the most likely to say they planned to shift their Pride month strategy this year, according to Gravity Research’s survey. That may stem from the conservative boycotts of Target and Bud Light last year.
Target has carried a Pride collection for over a decade. Yet last year, the big-box retailer removed some items and moved displays after employees faced threats. Boycotters targeted items for transgender shoppers, such as “tuck-friendly” swimsuits, and also criticized separate Pride merchandise for kids.
Instead of putting Pride merchandise in all stores this year, Target only carried it in the locations that accounted for 90% of total Pride sales in 2022 and 2023. It also stopped selling any Pride apparel for kids.
On the company’s website and in those select stores, shoppers can find a wide variety of Pride-themed items.
The volume of negative feedback to the Pride collection externally and internally is “significantly lower” this year than in 2023, according to a Target spokesperson.
In a statement, Target said it is “committed to supporting the LGBTQIA+ community during Pride Month and year-round” and would participate in Pride events across the country and support LGBTQ+ groups, in addition to offering Pride products.

A sign disparaging Bud Light beer is seen along a country road on April 21, 2023 in Arco, Idaho. Anheuser-Busch, the brewer of Bud Light has faced backlash after the company sponsored two Instagram posts from a transgender woman.
Natalie Behring | Getty Images

Anheuser-Busch InBev and other large beer brands, on the other hand, have backed away from public support of the LGBTQ+ community.
Conservatives like singer Kid Rock and Florida Gov. Ron DeSantis called for a boycott of the beer and its parent company, Anheuser-Busch InBev, after Bud Light sent personalized cans of its beer to transgender influencer Dylan Mulvaney. The marketing campaign coincided with the March Madness college basketball tournament.
Bud Light sales tumbled around 25%, and the brand lost its spot as the best-selling beer in the U.S., ceding the position it held for more than two decades to Constellation Brands’ Modelo.
AB InBev distanced itself from Mulvaney and fired Bud Light’s vice president of marketing. In October, AB InBev CEO Michel Doukeris said the brand would focus its marketing more on events like sports games and concerts. It also returned as the official sponsor of the UFC.
In recent months, some consumers have returned to Bud Light, as RBC Europe analysts estimate that the brand’s U.S. volume is down only about 10% these days. For its part, Bud Light hasn’t posted in support of Pride month on its Instagram or X pages this year.
The boycott was unusually sticky for a few reasons, according to Neil Reid, a geography professor at the University of Toledo who researches the beer industry. Studies have shown that consumers’ loyalty to top-selling beers may be more tied to the brand than the taste, Reid said.
Right-wing news outlets like Fox News also devoted plenty of airtime to the controversy, stretching its duration and potentially reaching new consumers who missed the initial reaction. Plus, once Bud Light sales fell, retailers gave more shelf space to its rivals.
“You can look at this issue from a moral, ethical perspective or you can also look at it from a pure business perspective. Those two often don’t result in the same strategy,” Reid said.

The New York Stock Exchange welcomes e.l.f. Beauty (NYSE: ELF), on March 18, 2024, to the podium to celebrate its 20th anniversary of founding. To honor the occasion, Tarang Amin, Chairman & CEO, joined by Tara Dziedzic, NYSE Head of Listings – U.S. Sectors, rings The Opening Bell®.   

Doubling down on diversity

While some companies have grown more cautious about promoting diversity efforts, others have stepped up inclusion initiatives. E.l.f. Beauty, for example, launched a provocative advertising campaign in mid-May called “So Many Dicks.” The ads, which were on billboards in prominent places in New York City, highlighted that there are more men named Dick (including Richards, Richs and Ricks) than entire groups of underrepresented people. It also included video spots with athlete and social rights activist Billie Jean King.
The beauty brand is one of only four U.S. publicly traded companies with a board that’s made up of members who are two-thirds women and one-third ethnically diverse.
E.l.f. Beauty CEO Tarang Amin said customers, especially its core audience of Generation Z shoppers, want brands to stand up for causes they support. He said he’s noticed corporate leaders have grown more skittish about speaking up than they used to be.
“Our values are one of the things that really differentiates E.l.f. and what our community expects,” he said.
Amin added: “If you don’t stand up for what you really believe, and you’re only going off of fear of what somebody may object to, I think you lose the opportunity of making a real difference in the world.”
Amin said the company’s stock performance shows its diverse board and inclusive messaging are also lifting its bottom line. Shares of E.l.f. are up about 46% this year, outpacing the approximately 15% gains of the S&P 500.
Pride initiatives continue this year elsewhere in the business world. Skittles sold a limited-edition Pride pack of its rainbow-colored candies like it has over the past five years. The brand, which is owned by Mars Wrigley, donates $1 for each Pride pack sold to GLAAD, up to $100,000 and matching donations of up to $25,000.
Macy’s highlighted LGBTQ+-owned, founded and designed brands on the websites of Bloomingdale’s, Bluemercury and its namesake brand in June. Over the past five years, the department store operator has raised more than $6.2 million for the Trevor Project, a nonprofit that supports suicide prevention for LGBTQ+ young people.
GLAAD’s Ellis said she’s encouraged by companies’ continued support and said they “are going to be on the right side of history with this.”
But she said there’s work to do, especially to support the transgender community. Politicians across the country have proposed bills that restrict gender-affirming care and transgender rights.
Gravity Research’s Hartig said companies have backed away from including transgender people in marketing after conservatives targeted them in political campaigns and during last year’s Pride month.
But not all of the backlash against corporate diversity, equity and inclusion efforts has gained the traction activists would have hoped.
The number of shareholder proposals opposing environmental, social and governance initiatives has surged, according to ISS-Corporate, a Rockville, Maryland-based provider of data and analytics to corporations. Anti-ESG proposals have been voted on at meetings of Russell 3000 companies held between Jan. 1 and June 30 this year rose to 83, up from 55 in the same period in 2023 and 37 in 2022.
Yet voter support has fallen each year, to a median support rate of 1.5% in 2024, versus 1.7% in 2023 and 2.9% in 2022.
— CNBC’s Amelia Lucas contributed to this report
Disclosure: CNBC is owned by Comcast NBCUniversal, which is one of the corporate sponsors of the Stonewall National Monument Visitors Center. More