Boeing to buy supplier Spirit AeroSystems in $4.7bn deal
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The US aircraft maker has reversed a decision to outsource part of its production amid a safety crisis.
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A Boeing 737 MAX aircraft is shown on the assembly line during a brief media tour at the Boeing facility in Renton, Wash., on June 25, 2024. (AP)
Boeing has agreed to a $4.7 billion deal to repurchase Spirit Aerosystems, the parts supplier it sold nearly 20 years ago. This move comes in response to safety concerns following an incident earlier this year when a panel blew off an Alaska Airlines-operated plane mid-flight.
Talks to buy back Spirit Aerosystems began just weeks after a door panel blew out mid-air on one of Boeing’s 737 Max 9s in January, shortly after taking off from Portland, Oregon. Investigations by the US safety regulator later discovered that the panel was missing four key bolts, which had been removed during repairs to damaged rivets last year at Boeing’s facility in Renton, Washington.
The US aircraft maker says it aims to enhance safety and quality in its manufacturing processes by acquiring Spirit Aerosystems, which supplies fuselage and wing parts.
The deal to bring Spirit back in-house marks a shift from Boeing outsourcing key components for its planes. Spirit was spun off from Boeing in 2005, but it still accounts for about 70% of its orders, with roughly 25% coming from Airbus—Boeing’s arch-rival.
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Boeing President and Chief Executive Dave Calhoun said, “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—centered on safety and quality.”
Airbus will take over the part of Spirit’s business in Northern Ireland that manufactures wings and fuselage for its A220 jet. Spirit is one of Northern Ireland’s largest manufacturing employers, with about 3,500 staff across the country.
Approximately 40% of Spirit jobs in Northern Ireland are linked to production for companies including Bombardier and Rolls-Royce, and Airbus has said it will aim to sell some of these parts. Boeing will pay Airbus $559 million in compensation to take over operations at four of its plants, including the plant in Belfast.
The total transaction value is about $8.3 billion when Spirit’s net debt is included, Boeing said. Spirit shareholders will receive $37.50 a share as part of the deal.
Boeing could be criminally charged
It was revealed that the US Department of Justice is poised to charge Boeing with fraud. However, plans to offer the planemaker a plea deal have infuriated the loved ones of hundreds of passengers who died in two fatal crashes five years ago.
Boeing will be granted until the end of this week to decide whether it will plead guilty to the charge and avoid trial, officials told families of those onboard the fatal Lion Air flight 610 and Ethiopian Airlines Flight 302, which claimed 346 lives.
Attorneys representing the relatives accused the federal government of cooking up “another sweetheart plea deal” with Boeing.
