Boeing in Talks to Take Over Troubled Supplier Spirit Aerosystems
Boeing, the American aerospace company, is currently engaged in discussions to acquire Spirit Aerosystems, a major global air parts supplier. Spirit Aerosystems, which was originally spun out of Boeing in 2005 as part of a cost-cutting initiative, continues to rely on Boeing for over two-thirds of its business. The potential takeover comes amidst a series of manufacturing issues that have plagued both companies.
One of the key incidents that has put Boeing under scrutiny occurred in January when a piece of one of its planes blew off mid-air. An investigation by the US government revealed that bolts meant to secure the panel had been removed at Boeing’s factory in Washington, allegedly to fix damaged rivets, and were never re-installed. The panel in question had been manufactured by Spirit Aerosystems before being sent to Boeing for final assembly. This incident prompted the Federal Aviation Administration (FAA) to conduct a thorough review of Boeing’s safety management systems. As a result, the FAA has given Boeing 90 days to develop a comprehensive action plan to enhance its safety protocols.
Boeing has already been working closely with Spirit Aerosystems to address a series of quality issues that have caused delays in plane deliveries. These challenges led to the appointment of a new CEO at Spirit Aerosystems last year. In light of these ongoing efforts, Boeing released a statement expressing their belief that the reintegration of their manufacturing operations with Spirit Aerosystems would strengthen aviation safety, improve quality, and benefit their customers, employees, and shareholders.
News of the potential takeover talks has had a significant impact on the stock market. Shares in Spirit Aerosystems surged by more than 10% following reports of the discussions, resulting in a market value exceeding $3.7 billion. Conversely, shares in Boeing experienced a decline of over 1% after the news broke in the Wall Street Journal.
While Boeing explores the possibility of acquiring Spirit Aerosystems, reports suggest that Spirit Aerosystems is also considering selling its Northern Irish unit to Airbus. However, neither company has provided an official comment on these reports.
Spirit Aerosystems currently employs more than 20,600 individuals worldwide, with approximately 3,400 employees based in Belfast and 1,120 in Prestwick. The potential takeover by Boeing could have far-reaching implications for the future of both companies and the aviation industry as a whole.
In conclusion, Boeing’s discussions to acquire Spirit Aerosystems highlight the challenges faced by both companies in recent years. The potential integration of their manufacturing operations could lead to improved safety measures and enhanced quality control. However, the ultimate outcome of these talks remains uncertain, and the aviation industry will be closely watching for any developments in the coming months.