Boeing to reacquire spun-off supplier Spirit AeroSpace to shore up safety

Because the best place for a troubled supplier is beneath the wing of original parent company

Nineteen years and a whole bunch of controversy later, Boeing has decided to reacquire Spirit AeroSystems, maker of parts including the door plug included in select Boeing 737 Max 9 aircraft. 

Spirit, which manufactures plane parts like fuselages, wings, and other components for both Boeing and Airbus, is being reacquired for $4.7 billion, with a total transaction value of $8.3 billion once Spirit's debt is added to the mix. Spirit was originally spun off from Boeing in 2005 for what Spirit spokesperson Joe Buccino confirmed was a cost-saving measure. 

"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," outgoing Boeing CEO Dave Calhoun said of the deal.

Patrick Shanahan, former Boeing executive and current CEO at Spirit, had much the same to say about his company being welcomed back into the Boeing fold, touting it as a way to "enable greater integration of both companies' manufacturing and engineering capabilities, including safety and quality systems."

Shanahan assumed his role at Spirit in October 2023.

Spirit shareholders will be compensated with Boeing stock at a possible rate of 0.25 Boeing shares to each Spirit share, or as little as 0.18 Boeing shares per Spirit share owned, depending on the stock price when the deal closes. 

Spirit also plans to divest from a business and operations center in Malaysia, and facilities in Ireland and Scotland that do work for Airbus. We're told that Spirit doesn't anticipate any job losses as a result of those divestitures. 

Exorcising the demons

Boeing has been having quality control issues for several years, some of which have been allegedly linked to issues at Spirit.

Spirit was also hit by the 2018 and 2019 fatal crashes of a pair of Boeing 737 Max aircraft. The company was manufacturing the aircraft at the time and was heavily affected by the nearly two-year grounding of the aircraft after the crashes, which have largely been blamed on faulty software.

A number of whistleblowers – employees at both Boeing and Spirit – have come forward in the years since the crashes, and the rate of damning reports only increased after the door plug blowout.

Boeing engineer Sam Salehpour said in April that Boeing 787 aircraft contained hairline gaps in the fuselage that could cause a structural failure, and former Boeing manager Merle Meyers came forward later that month to report years of declining quality as company leaders shifted their priorities from quality to speed and profitability.

Another Boeing whistleblower was found dead in March, and in May a former quality manager at Spirit came forward to allege quality issues in nearly every job the company did.

"It was very rare for us to look at a job and not find any defects," Santiago Paredes recently told CBS. "If quality mattered, I would still be at Spirit."

Spirit has also entered into a definitive agreement with Airbus to hand related segments off to that company, for which Airbus will be paid $559 million. 

Boeing didn't respond to questions for this story. ®

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