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Boeing will buy back troubled supplier Spirit AeroSystems, closing the book on an experiment with outsourcing component manufacturing.
The US$8.3 billion deal will see Spirit – formerly Boeing’s plant in Wichita, Kansas, before being spun off in 2005 – return to the planemaker’s control, bringing “substantially all Boeing-related commercial operations” back in-house alongside some other commercial, defence and aftermarket operations.
“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,” said Boeing president and CEO Dave Calhoun.
“By reintegrating Spirit, we can fully align our commercial production systems, including our Safety and Quality Management Systems, and our workforce to the same priorities, incentives and outcomes – centred on safety and quality.”
Spirit manufactures fuselages and other components under contract for Boeing’s 737 aircraft, including the 737 MAX family, which has come under increased scrutiny over safety issues following the mid-air blowout of a door plug on board a 737 MAX 9 in January.
With the collapse of Bonza, Virgin Australia is the only Australian airline flying the 737 MAX family, having received its seventh MAX 8 at the end of June.
Virgin’s order of 31 new 737 MAX aircraft, including all 25 of its MAX 10s, has been delayed by the ongoing troubles at Boeing, which was barred by the Federal Aviation Administration (FAA) from ramping up MAX production.
Patrick M. Shanahan, president and CEO of Spirit, said the buyout is the right move for the manufacturer.
“After carefully evaluating Boeing’s offer to combine, we are confident this transaction is in the best interest of Spirit and its shareholders, and will benefit Spirit’s other stakeholders,” he said.
“Bringing Spirit and Boeing together will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems.”
Spirit also manufactures components for some Airbus planes, and the company is negotiating for the European planemaker to acquire the relevant assets.
“We are proud of the part we have played in Airbus’ programs and believe bringing these programs under Airbus ownership will enable greater integration and alignment,” said Shanahan.
Boeing this year recorded a US$355 million net loss in the March quarter, fuelled primarily by the Commercial Airplanes division.
