As part of its efforts to restore its damaged safety reputation, Boeing has reached an agreement to acquire Spirit Aerosystems, one of its major suppliers and manufacturing partners. The deal, valued at $4.7 billion or $37.25 per share, will be an all-stock transaction. The announcement comes after several months of discussions between Boeing and the company, which was spun off in 2005. Boeing had previously stated its intention to acquire Spirit, as it believes that recombining the companies will enhance safety. The total transaction value, including Spirit’s net debt, is estimated to be approximately $8.3 billion. Boeing’s President and CEO, Dave Calhoun, expressed confidence that this deal will benefit the flying public, airline customers, employees of Spirit and Boeing, shareholders, and the country as a whole.
Spirit AeroSystems is a key supplier for Boeing, manufacturing significant components for various Boeing models, including the fuselages for the 737 Max. These parts are then sent to Boeing’s factories for final assembly. Additionally, Spirit also produces parts for Airbus, although Boeing remains its primary customer.
However, Spirit has encountered several quality control problems in recent years. In response, Boeing agreed to provide additional funding to help address Spirit’s quality and reliability issues, as these problems had adversely affected Boeing’s production output and reputation.
One notable incident involving Spirit was the door plug blowout on an Alaska Airways 737 Max in January. The incident occurred shortly after takeoff and resulted in a significant rupture in the aircraft’s side.
Last week, Boeing disclosed that two separate groups of employees were involved in handling the door plug, a component used as a substitute for an emergency exit door. The first group of employees removed the door plug to address issues with rivets supplied by Spirit AeroSystems. However, they failed to document the removal of the door plug and the four necessary bolts to secure it in place. Consequently, the second group of employees replaced the door plug without realizing that the bolts were missing.
Following this incident, multiple whistleblowers, including employees and contractors of Spirit, have come forward. One such whistleblower, who works for a contractor of Spirit AeroSystems, recently alerted the company to significant gaps in a crucial part of the 787 Dreamliner planes. These gaps were deemed to pose a “catastrophic” threat to passengers.
Spirit has faced previous safety issues with Boeing, including a manufacturing process deviation in 2023 that resulted in a pause in deliveries of 737 Max jets. Additionally, earlier this year, a Spirit employee alerted Boeing to potential non-compliance with drilling requirements, leading to the need for rework on around 50 undelivered planes.
Lawyers representing the families of victims of two fatal 737 Max crashes have reported that the US Justice Department is close to reaching an agreement with Boeing. The agreement is said to involve a corporate monitor and a fine, in exchange for a guilty plea to criminal charges. However, these lawyers have strongly criticized the proposed deal, referring to it as a “sweetheart deal.”
Please note that this is an ongoing story and will be updated accordingly.