- Boeing is in talks to acquire fuselage maker Spirit AeroSystems.
- It comes less than two months after a section of a Boeing 737 Max 9 jet blew out during an Alaska Airlines flight.
- Both companies have been scrambling to stamp out manufacturing flaws on Boeing’s top-selling plane.
Boeing is in talks to buy back Spirit AeroSystems, which makes fuselages for Boeing’s 737 Max jets, the companies said Friday, as the manufacturers scramble to stamp out production flaws on the top-selling plane.
Shares of Spirit rose 15% on Friday, while Boeing’s stock fell close to 2%. Spirit AeroSystems had a market capitalization of $3.8 billion as of Friday’s close.
Boeing in 2005 spun off operations in Kansas and Oklahoma that became the present-day Spirit AeroSystems. About 70% of Spirit’s revenue last year came from Boeing, and roughly a quarter came from making parts for Boeing’s main rival, Airbus, according to a securities filing. Airbus declined to comment on the deal talks.
“We believe that the reintegration of Boeing and Spirit AeroSystems’ manufacturing operations would further strengthen aviation safety, improve quality and serve the interests of our customers, employees, and shareholders,” Boeing said in a statement on Friday. “Although there can be no assurance that we will be able to reach an agreement, we are committed to finding ways to continue to improve the safety and quality of the airplanes on which millions of people depend each and every day.”
Spirit also confirmed the talks.
Boeing CEO Dave Calhoun, when asked about outsourcing production of parts of its airplanes, told CNBC in January: “Did it go too far? Yeah … probably did, but now it’s here and now I gotta deal with it.”
Spirit has struggled financially, and was last profitable in 2019, before the pandemic. In October, Spirit appointed Pat Shanahan, who spent about three decades at Boeing, as its new, interim CEO.
The deal talks come less than two months after a section of a Boeing 737 Max 9 plane blew out during an Alaska Airlines flight. The Federal Aviation Administration temporarily grounded all of the planes in January, leading to investigations into the accident and Boeing’s production lines.
It was the latest and most serious in a host of flaws on the Boeing 737 Max, the company’s bestselling jet.
The bolts on the door plug of the Max involved in the January accident appeared not to have been attached when it left Boeing’s Renton, Washington, factory, according to a preliminary report from the National Transportation Safety Board.
Boeing has disclosed several production problems and quality flaws on the fuselages that Spirit makes, including incorrectly drilled holes and wrong spacing on some fuselage components, problems that have slowed deliveries of new jets to airlines.
The FAA, which oversees Boeing and certifies its planes, has vowed deeper scrutiny of the company’s production lines since the Jan. 5 accident. Earlier this week, after a meeting with Calhoun, the FAA’s administrator, Mike Whitaker, said the agency was giving the company 90 days to come up with a plan to improve its quality control and safety systems.
Boeing and Spirit’s deal talks were reported earlier by The Wall Street Journal.
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Source: Business - cnbc.com
