Boeing in Talk for Takeover of Spirit Aerosystems: Latest Updates
Update: 1 March 2024, Updated 8 hours ago
Boeing, the renowned aircraft manufacturer, is reportedly engaged in talks to acquire Spirit Aerosystems, a supplier that has been plagued by manufacturing issues in recent times. If the deal goes through, it would allow Boeing to regain control over the major global air parts supplier, which it had spun out of in 2005 as part of a cost-cutting initiative.
Manufacturer Seeking Relief Amid Manufacturing Pipeline Challenges
Spirit Aerosystems, which relies on Boeing for more than two-thirds of its business, has faced intense scrutiny over manufacturing flaws in its parts. In January, a critical piece of a Boeing plane that had been assembled using a component produced by Spirit broke off mid-air, raising significant concerns about manufacturing processes and quality control.
An investigation by the US government’s Federal Aviation Administration (FAA) revealed that the panel’s bolts, intended to secure it in place, had been removed during Boeing’s final assembly to address damaged rivets, and were never re-installed. Spirit had manufactured the faulty component.
As a consequence of a series of quality issues, deliveries of Boeing aircraft have suffered delays, resulting in the replacement of Spirit’s CEO last year. The FAA has subsequently issued a 90-day deadline for Boeing to develop a comprehensive plan to improve its safety management systems.
Possible Reintegration for Enhanced Aviation Safety and Quality
Elevating the significance of these discussions, Boeing expressed its belief that the reintegration of its manufacturing operations with Spirit AeroSystems would lead to an upgrade in aviation safety, along with improved quality, benefiting its customers, employees, and shareholders.
Following the initial reports of the takeover negotiations, Spirit’s shares surged by more than 10%, attributing it a market value of more than $3.7 billion. However, on the flip side, the shares of Boeing witnessed a decrease of over 1% in response to the reported discussions.
According to the Wall Street Journal, in addition to a potential takeover, Spirit is contemplating the sale of its Northern Irish unit to Airbus. However, the company has refrained from commenting on the matter in response to the BBC’s request for further insight.
With operations spread globally, Spirit employs more than 20,600 people, including 3,400 individuals in Belfast and 1,120 in Prestwick.
