Boeing Scoops Up Spirit AeroSystems, Its Troubled 737 Supplier

Boeing clinched a deal to buy Spirit AeroSystems, taking back a troubled fuselage maker that it split off two decades ago as the jet manufacturer grapples with production problems.

Spirit has been at the center of quality issues affecting 737 MAX jets. Boeing has been negotiating a deal for months and its executives have said that they believe taking control of Spirit’s operations will improve the safety and quality of its manufacturing.

In recent weeks, the two sides have discussed a deal that would have had Boeing paying more than $4 billion for roughly two-thirds of Spirit’s business. Boeing on Monday said it agreed to acquire Spirit in a $4.7 billion deal. As part of the deal, Spirit is expected to shed factories, including in Europe, that make parts for Boeing rival Airbus.

It is one of the biggest moves by departing Chief Executive David Calhoun to address Boeing’s manufacturing woes in the wake of a near midair tragedy on Jan. 5. The aircraft maker has also announced a shake-up of its executive ranks and said it is searching for Calhoun’s replacement.

Spirit, which makes 737 fuselages and other airframe components, was created when Boeing sold some of its factories in 2005 in a push to focus on final assembly. Last year, Spirit had about 20,000 workers and $6 billion in revenue but it has been losing money. Boeing in April agreed to make $425 million in advance payments to cover costs tied to its quality-improvement efforts.

Spirit has been run since October by Pat Shanahan, a 30-year Boeing veteran who left the company in 2017 to serve in the Department of Defense during the Trump administration. The 62-year-old has held discussions about taking over the Boeing CEO job, but the talks were largely on hold as the two companies negotiated the deal.

Spirit’s factory in Wichita, Kan., made the fuselage involved in the Alaska Airlines door-plug blowout in January. The fuselage had defective rivets, or fasteners, and investigators believe workers at a Boeing plant in Renton, Wash., failed to put back bolts needed to secure the door plug when they opened it to make the repair.

Problem parts from Spirit have been an issue for Boeing for years as production snafus and quality lapses at the supplier slowed production at Boeing and left it short of jets it promised to deliver to airlines.

More recently, Boeing has slowed its factories and is delivering less than half as many jets as it was at the end of 2023. That pace has put strains on several of its suppliers, including Spirit. In May, Spirit said it was cutting hundreds of jobs in the Wichita plant.

Write to Sharon Terlep at [email protected]