Aircraft manufacturer Boeing has confirmed that it is buying back a key parts supplier that has been plagued with quality control issues in an attempt to improve its safety oversight and rescue its reputation.
Boeing created Spirit AeroSystems in 2005 as part of a strategic move to outsource the production of key parts for the 737 and 787 Dreamliner aircraft models by selling off its plants in Wichita, Kansas, and Tulsa, Oklahoma.
After Spirit was created, the company expanded its operations and opened plants in several other countries, including Malaysia, where the door plug that blew out from an Alaska Airlines 737MAX in January was made.
Boeing sold its own manufacturing plants for $1.2 billion, but nearly 19 years later, Boeing is buying back Spirit AeroSystems in a deal worth as much as $8.3 billion, which includes $4.7 billion in equity and all of Spirit’s debts.
“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,” commented embattled Boeing CEO Dave Calhoun on Monday.
The decision to acquire Spirit is part of a major strategic shift from Boeing to improve workmanship quality and its safety oversight.
Calhoun explained: “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.”
Since Spirit’s creation, the company has become one of the largest non-OEM (original equipment manufacturer) aircraft parts designers and manufacturers and also supplies rival aircraft manufacturer Airbus.
On Monday, Airbus separately announced that it had entered into an agreement with Spirit to take over the plants that produce parts for its aircraft, including the A350 fuselage sections in Kinston, North Carolina and St. Nazaire, France, and the wings and mid-fuselage for the A220 in Belfast, Northern Ireland, and Casablanca, Morocco.
Airbus said it would receive $559 million as compensation from Spirit to take over the plants.
Calhoun hopes to close the transaction and bring back parts production in-house by mid-2025. In the meantime, Boeing said it would be working closely with Spirit to ensure quality doesn’t take a nose dive.
