Boeing to Acquire Troubled Supplier Spirit AeroSystems

Boeing is making a bold move by bringing key supplier Spirit AeroSystems back under its wing in an all-stock deal valued at around $8.3 billion, including debt. This decision comes after years of quality control issues that have plagued both companies, leading to serious incidents such as a door plug panel blowing out mid-flight in January.

The reunification of key parts of Boeing’s manufacturing process is seen as a necessary step to address these issues, particularly those stemming from disconnects in the two-tier installation process of Spirit’s fuselages. Boeing CEO Dave Calhoun believes that aligning the workforces of both companies will lead to improved quality control and better outcomes.

Analysts have criticized Boeing’s initial sale of what would become Spirit in 2005, with some calling it a decision that “haunted both companies time and time again.” Completing this deal is crucial for ensuring smoother production for the 737 and safeguarding the ramp-up of the 787.

The deal is subject to regulatory approvals, including an antitrust review due to the potential impact on the already concentrated aerospace industry. Additionally, Airbus is expected to acquire certain loss-making Spirit plants that manufacture major sections of their planes as part of the deal, with Airbus receiving $559 million to complete the transaction.

Overall, this acquisition marks a significant step for Boeing in addressing quality control issues and streamlining its manufacturing process, ultimately aiming to improve the overall performance and safety of its aircraft.