Boeing Agrees To Buy Spirit AeroSystems

Boeing has agreed to buy back Spirit AeroSystems, its fuselage maker, in an attempt to improve safety and manage the company’s quality control.

“We believe this deal is in the best interest of the flying public, our airline customers, the employees of Spirit and Boeing, our shareholders and the country more broadly,” said Boeing President and CEO Dave Calhoun in a press release. “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.”

Calhoun also wrote a letter to employees, which stated, “By once again combining our companies, 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. This is an opportunity to bring back critical airplane manufacturing work on Boeing airplanes into our factories — where Boeing and Spirit world-class engineers and mechanics can work seamlessly together, focused on a common mission to build safe and quality airplanes for our customers.”

Spirit today announced a definitive merger agreement under which Boeing will acquire Spirit. Spirit also announced a binding term sheet with Airbus under which Airbus will assume ownership of certain Spirit operations that serve Airbus programs. https://t.co/v6ulP5H3Rp pic.twitter.com/kgMs55rRz3

— Spirit AeroSystems (@SpiritAero) July 1, 2024

Calhoun concluded, “As we work to secure the necessary regulatory approvals, Boeing and Spirit will remain independent companies, but we will continue to work collaboratively with Spirit and its leadership to strengthen the quality and safety of Boeing’s commercial airplanes.”

In 2005, Boeing spun off operations in Kansas and Oklahoma, which became the present-day Spirit AeroSystems. CNBC reported that Boeing accounted for around 70% of Spirit’s revenue in 2023. A quarter of its revenue came from manufacturing parts for Airbus, Boeing’s primary rival. The transaction, which is expected to give Spirit an equity value of $4.7 billion, is scheduled to be complete by mid-2025 after regulatory approval.

Spirit produces 737 fuselages for Boeing. The company was partly responsible for the manufacturing of the Max 9, which lost a door plug during an Alaska Airlines flight in January. That incident led to an investigation by the National Transportation Safety Board and other agencies.

This merger comes on the heels of a plea agreement handed to Boeing from the Department of Justice. The agreement would attempt to resolve criminal charges against the company stemming from two fatal 737 MAX crashes that killed 346 people; the Lion Air crash in 2018 and the Ethiopian Airlines crash in 2019. The victim’s relatives are unhappy with the deal, which would include three years of probation, a fine, and a monitor to ensure safety compliance, according to CNN.

“There is no accountability, no admission that Boeing’s admitted crime caused the 346 deaths, and the families will most certainly object before Judge Reed O’Connor and ask that he reject the plea if Boeing accepts,” stated Robert Clifford, lead counsel in the civil litigation against Boeing.