Boeing desperately needs to take back control of its operations as the bad headlines mount.
Plane manufacturing giant Boeing will buy Spirit AeroSystem, one of its major suppliers and the world’s largest standalone aerostructure companies. Spirit used to be a Boeing subsidiary based in Wichita, Kansas, becoming a standalone firm in 2005.
Boeing purchased back its former subsidiary at $37.25 per share, totaling a $8.3 billion valuation including debt. “Bringing Spirit and Boeing together will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems,” Spirit CEO Pat Shanahan said.
Spirit’s stock price jumped 5.20% on Monday in the pre-trading session to $34.58.
Seattle-based Boeing is the world’s second-largest plane manufacturer behind the French Airbus. These two giants dominate the plane manufacturing sector, with dozens of smaller suppliers providing more or less sophisticated parts.
Spirit was one of these suppliers, manufacturing the fuselage of Boeing’s 737 MAX and 787 Dreamliner models. It also provided manufacturing for some Airbus components following its original separation from Boeing.
In a separate Boeing-Airbus deal, the French planemaker will take over its core businesses conducted by Spirit. These include plants in Morocco, Northern Ireland, and the United States. Airbus will pay a symbolic $1 for the operations while receiving $559 million in compensation from Spirit.
Cases where Boeing and Airbus signed a deal together are exceedingly rare. Airbus’ stock price jumped 3.17% on Monday.
Times of crisis
Boeing’s decision to acquire Spirit AeroSystem came at an extraordinarily difficult time for the Seattle-based company. Following the January 5th accident, when a Boeing 737 MAX operated by Alaska Airlines lost a door mid-flight, the company has been ridden by bad headlines.
A swath of other accidents, from minor mishaps to serious calamities, forced federal authorities to investigate. Boeing is currently under several investigation probes by the Federal Aviation Agency (FAA) unveiling a number of safety issues.
Moreover, two Boeing whistleblowers were found dead under mysterious circumstances before giving crucial testimony to federal authorities, sparking additional speculation.
Boeing’s CEO Dave Calhoun will resign by the end of this year.
Several airlines are replanning their annual fiscal plans around Boeing’s crisis. Long-time Boeing clients like United and Southwest are ordering fewer planes, while others are switching to Airbus altogether.
By consolidating with Spirit AeroSystem, Boeing hopes to bring more stability to its future operations. Solving all of its issues, however, will be a grueling and long process.
Argomenti
