Two Wrongs Make A Flight? Troubled Boeing In Talks To Buy Troubled Supplier Spirit Aero
Just because Boeing doesn't have other things to worry about - like airplanes that don't turn into convertibles mid-air or are glorified DEI paperweights, for example - the company, which for the past decade has been mired in a literal shitstorm of scandals and deadly manufacturing debacles, has decided that two wrongs make a right, and according to the WSJ, Boeing is in talks to acquire Departed Spirit AeroSystems, the just as troubled jet-fuselage supplier it split off two decades ago (and not "fuselage that split in two" although that has also been known to happen) that’s been at the center of quality issues affecting 737 MAX jets.
Citing people familiar with the matter, the WSJ reports that Spirit has hired bankers to explore strategic options and has had preliminary discussions with its former owner, Boeing. Of course, since any deal would have to get approval from Biden's communist FTC, the talks most likely won't result in a deal but one can hope. Spirit is also exploring selling operations in Ireland that make parts for Boeing’s chief rival, Airbus.
Just like the $120 billion Boeing, Spirit - which has a far smaller market valuation of $3.3 billion - has been under scrutiny for manufacturing problems that have hammered production at Boeing. Spirit ousted its CEO last fall and brought in a former Boeing executive to run it. Its share price, around $100 five years ago, was trading under $30 Friday morning. Spirit, which makes 737 fuselages and other airframe components, was created when Boeing sold some of its factories in 2005. Boeing accounts for nearly two-thirds of Spirit’s sales, with Airbus and defense companies comprising the rest.
Most recently, Spirit was in the spotlight after its was revealed that its factory in Wichita made the fuselage involved in the Alaska Airlines door-plug blowout in January. In that case, investigators believe workers at a Boeing plant in Renton, Wash., failed to put back bolts needed to secure the door plug during production. In other words, DEI all around.
Both Boeing and Spirit have come under increasing pressure from airline customers and federal regulators to shore up quality issues following the Alaska Airlines accident.
The WSJ notes, that as problems at Spirit mounted, stalling Boeing’s production, last year Boeing CEO Dave Calhoun shot down suggestions that the company might acquire Spirit. But more recently Calhoun has softened his stance. When asked about Boeing’s outsourcing strategy, Calhoun recently told CNBC, “did it go too far? Yeah, it probably did. But now it’s here and now. And now, I’ve got to deal with it.”
In any case, a deal would be a strategic reversal. Boeing sold the Wichita plant in a push to focus on final assembly. In recent years, that facility has been plagued by production problems and quality lapses that have slowed production and left the plane maker short of jets it promised to deliver to airlines.
Still, the market was happy to take the news and fly run with it: SPR stock spiked as much as 16% while Boeing broefly slumped below $200, a level it hasn't budged from in 4 years.
