Boeing-Spirit Aero deal nears close as Airbus talks advance
Airbus SE is edging closer to an agreement with Spirit AeroSystems Holdings Inc. to take over parts of the aerospace supplier’s business, paving the way for an acquisition of the bulk of the company by arch-rival Boeing Co. as early as next week.
The European planemaker is set to take on Spirit’s unit in Belfast that produces wings for its smallest A220 model, as well as facilities in Kinston, North Carolina, and Saint-Nazaire in France that supply critical components for the advanced A350 widebody and Preswick in Scotland for the workhorse A320 model, according to people familiar with the discussions, who asked not to be identified as the discussions are confidential.
The final terms are still being discussed, and any deal could still change or even fall apart, the people cautioned. Reuters reported earlier that the companies are getting close to striking a deal, and The AirCurrent reported that an accord might happen as early as Monday. Spirit rose 1.31% in U.S. trading Friday.
Loss-making Spirit has been looking to unwind its Airbus related operations ever since Boeing said it would buy back the company that it spun out almost two decades ago. Boeing wants to reintegrate Spirit after an accident in January on board a 737 Max-9 airliner revealed quality and manufacturing shortcomings at both Boeing and its most important supplier and led to a rethink of their relationship.
Airbus said it’s in discussions with Spirit “to protect the sourcing of our programs and to define a more sustainable way forward, both operationally and financially,” according to a statement by the European company. It had no further comment on the status of the talks. Spirit said it’s focused on providing “the best-quality product for our customers” and declined further comment.
Last month, Boeing Chief Financial Officer Brian West said he expected a deal with Spirit to be sealed by the second quarter of 2024, giving the planemaker just a few days to meet that timeline. Spirit has come under more financial strain as Boeing slows output of its 737 aircraft, the main source of revenue for both manufacturers.
Spirit has faced growing financial pressure and scrutiny alongside Boeing after a door-shaped panel blew out of a 737 Max jet minutes after takeoff. Shipments of 737 fuselages have plummeted since early March as Boeing stepped up its inspections in Kansas and declined to accept those with missing components or incomplete work.
For Boeing, a deal will secure a key supplier for the 737, 787 Dreamliner and other commercial jets in-house at a time when it needs to sharpen oversight of its processes. The move to buy back the asset follows Airbus’s approach of insourcing similar work in recent years. Boeing has also bought back a St. Louis factory that builds structural components for two fighter jets, a site it sold in 2001.
Reintegrating Spirit would help Boeing stabilize its supply chain and gain greater control of its aircraft production. The Wichita campus that builds most of the 737 airframe for Boeing along with the nose sections of the 787 Dreamliners had been at the heart of several defects as it grappled with post-COVID workforce turnover.