Unfinished fuselages for the Boeing 737 during production at the Spirit AeroSystems plant in Wichita, Kan.
Courtesy of Spirit AeroSystems
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Courtesy of Spirit AeroSystems
WASHINGTON – Boeing has reached an agreement to buy Spirit AeroSystems, one of its main suppliers, reuniting the aerospace giant with the plant that makes the fuselage of the 737 Max plane in Wichita, Kan.
The deal announced Monday marks a shift from Boeing’s two-decade strategy to outsource key parts of its manufacturing process. The troubled planemaker has struggled to rebuild trust with regulators, airlines and the flying public after a door plug panel blew an Alaska Airlines flight into midair earlier this year.
The Spirit deal, a stock transaction valued at $4.7 billion (including Spirit’s total debt of $8.3 billion), aims to give Boeing greater oversight and control of manufacturing operations, which have been under scrutiny tough this year.
“We believe this agreement is in the best interest of the flying public, our airline customers, Spirit and Boeing employees, our shareholders and the country more broadly,” Boeing CEO Dave Calhoun said in a statement announcing the deal. Calhoun will step down at the end of the year as part of a shakeup in the wake of the 737’s production problems and faced tough questions from senators at a hearing on Capitol Hill.
No one was seriously injured on Alaska Airlines Flight 1282 in January, but the incident reignited concerns about Boeing’s quality control after the crashes of two 737 Max jets in 2018 and 2019, which killed 346 people.
“The merger of Spirit and Boeing will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems,” Spirit CEO Patrick Shanahan said in a statement. A former executive at Boeing, Shanahan took the reins at Spirit late last year after a series of embarrassing and expensive quality problems.
A Boeing 737 fuselage built by Spirit AeroSystems sits outside a Boeing manufacturing plant in Renton, Wash., on Feb. 5, 2024.
David Ryder/Bloomberg/Getty Images
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David Ryder/Bloomberg/Getty Images
A Boeing 737 fuselage built by Spirit AeroSystems sits outside a Boeing manufacturing plant in Renton, Wash., on Feb. 5, 2024.
David Ryder/Bloomberg/Getty Images
Federal investigators believe the door plug panel that blew up a 737 Max 9 in January was first installed at Spirit’s factory in Wichita, Kan., and then shipped to Boeing’s plant in Renton, Wash., for assembly. Once it arrived in Washington, National Transportation Safety Board investigators say damaged rivets were discovered in the plane’s fuselage that required the door hatch to be opened for repairs.
After Spirit AeroSystems personnel completed that work at the Boeing factory, the bolts were not reinstalled, according to photographic evidence provided to the NTSB by Boeing. In subsequent inspections, loose bolts were found on other 737 Max planes operated by Alaska and United.
The fallout from the door plug incident has caused additional anxiety in Wichita, a city with deep ties to the aviation industry.
Boeing recently advanced Spirit $425 million to help stabilize the company’s finances amid a production slowdown of the planemaker’s popular 737 line. Federal regulators limited Boeing’s production to 38 planes a month, and Boeing has been making even less than that as it tries to establish tougher quality control standards.
In May, Boeing presented regulators at the Federal Aviation Administration with a detailed plan to fix quality control problems. But not everyone is convinced that the merger with Spirit will help, with whistleblowers warning that the problems at the company’s 737 factory run deep.
Boeing and Spirit had been in talks for months. But the deal was complicated because Spirit also supplies parts to Airbus, Boeing’s main rival in commercial aviation. While Boeing and Spirit agreed to the deal, Spirit is still negotiating with Airbus. In a statement, Airbus said that while there is no guarantee that a transaction will be completed, “all parties are willing and interested in working in good faith to progress and complete this process as quickly as possible.”
After the Alaska Airlines crash, the FBI told passengers on the flight that they may be “a possible victim of a crime.” In March, Texas Attorney General Ken Paxton opened an investigation into Spirit to examine “the organization, conduct and management of the company.”
Spirit was created after Boeing sold its Wichita division in 2005. Boeing had manufactured planes there since the 1940s, including the B-29 Superfortress and other military bombers during World War II.