Federal regulators said late Friday they could slap a $5.4 million fine on Boeing Co. BA, -1.91% for allegedly installing "nonconforming" wing parts on some 737 Max jets and later presenting the planes as ready for certification. The civil penalty would be in addition to a fine of $3.9 million proposed against Boeing in December for allegedly installing the same components on 133 of the company’s 737 Next Generation jets, the Federal Aviation Administration said. The parts in question are slat tracks located on the edge of the 737 wings used to guide movement of panels known as slats. According to the FAA, "Boeing failed to adequately oversee its suppliers to ensure they complied with the company’s quality assurance system," and the failure "resulted in the installation of slat tracks that were weakened by a condition known as hydrogen embrittlement that occurred during cadmium-titanium plating." Boeing then submitted the jets for final certification after determining the parts could not be used because they had failed a strength test, the FAA said. The FAA said the parts were shipped to a third-tier supplier, Southwest United Industries, which shipped the parts to Spirit AeroSystems Holdings Inc. SPR, -4.25%, which then delivered the parts to Boeing. Spirit earlier Friday announced thousands of layoffs in connection with Boeing’s decision in December to halt the production of 737 Max jets. The airplanes have been grounded worldwide since March following two deadly crashes connected to a faulty anti-stall system. Shares of Boeing fell 0.1% in the extended session, after ending the regular session down 1.9%. Spirit AeroSystems shares were flat in the after-hours session after a retreat of 4.3% at the close.
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