Big News: Boeing Buys Spirit AeroSystems for $4.7 Billion
Boeing just made a major move to buy fuselage maker Spirit AeroSystems. The deal is worth $4.7 billion in Boeing stock. Including Spirit’s debt, the deal totals $8.3 billion. This acquisition is set to improve safety and quality control at Boeing.
Why This Matters
Both Boeing and Spirit have faced issues with manufacturing flaws. Boeing’s CEO, Dave Calhoun, believes bringing Spirit in-house will help fix these problems. Calhoun said this deal shows Boeing’s commitment to quality and safety. He expects the deal to close by mid-2025.
What’s the Deal?
Boeing agreed to pay $37.25 per share in Boeing stock for Spirit. Spirit’s shares were at $32.87 before the deal. Spirit’s operations in Belfast, Wichita, and North Carolina will be sold to Airbus. Airbus will get $559 million from Spirit for these operations.
Background
Boeing spun off operations in Kansas and Oklahoma in 2005, which became Spirit AeroSystems. Last year, Boeing made up about 70% of Spirit’s revenue. About 25% of Spirit’s revenue came from Airbus.
The Crisis that Sparked the Deal
In March, Boeing disclosed it was in talks to buy Spirit. This followed a fuselage panel blowout on a Boeing 737 Max 9 during an Alaska Airlines flight. The incident highlighted serious production issues. Spirit-made fuselages had misdrilled holes and misconnected panels.
Leadership Changes
Dave Calhoun will step down as Boeing CEO at the end of the year. Spirit’s CEO, Pat Shanahan, might be his successor.
Impact on Airbus
Airbus has a deal with Spirit to take over the manufacturing lines dedicated to Airbus planes. These lines include operations in Belfast, Wichita, and North Carolina.
Safety and Production Issues
A preliminary report from the National Transportation Safety Board found that bolts holding the door plug weren’t attached to the Max 9 when it left Boeing’s factory. Boeing is working to only accept defect-free fuselages to improve quality.
Financial Hits
The safety crisis has slowed Boeing’s deliveries and hurt both Boeing and Spirit financially. Boeing’s shares have dropped more than 30% this year. The FAA won’t let Boeing expand production until it’s satisfied with the production lines.
What’s Next?
Calhoun faced tough questions from lawmakers over Boeing’s safety record. The company is under pressure to improve.
Key Points
- Boeing buys Spirit AeroSystems for $4.7 billion in stock.
- Deal totals $8.3 billion including debt.
- Acquisition aims to improve safety and quality control.
- Dave Calhoun to step down as CEO; Pat Shanahan might be successor.
- FAA scrutinising Boeing’s production lines.
Final Thoughts
This deal is a significant step for Boeing in addressing its safety and production issues. By bringing Spirit in-house, Boeing aims to align production systems and workforces to improve quality control and safety. The impact of this acquisition will be closely watched as Boeing works to rebuild its reputation and financial health.
