Boeing’s 737 fuselage parts are located at Spirit AeroSystems’ assembly shop in Wichita, Kansas.
Daniel Acker | Bloomberg | Getty Images
boeing company Said on Monday that it would repurchase spirit aerospace systems inc. The plane maker said the deal, in an all-stock deal, would improve safety and quality as it grapples with the latest manufacturing crisis.
Boeing revealed in March that it was in talks to acquire the Wichita, Kan.-based company, weeks after Alaska Airlines revealed fuselage panels from a nearly new Boeing 737 Max 9 aircraft Exploded in mid-air. Spirit makes 737 fuselages and other parts, including some for Boeing’s 787 Dreamliner.
The National Transportation Safety Board’s preliminary report into the Jan. 5 accident said the bolts that hold the door jams in place did not appear to be installed on the Max 9 when it left the Boeing factory and was handed over to Boeing. Alaska Airlines months before the accident.
It is the most serious of a series of production problems on Boeing planes, which also include faulty drilling and faulty attachment of fuselage panels in the Spirit-built fuselage.
The crisis caused by a blown door jam in the Alaska accident has slowed deliveries of new Boeing Co. planes and dealt a financial blow to Spirit Airlines and Boeing Co. Its chief financial officer said in May that the company would burn cash this year rather than generate cash – about $8 billion by the first half of 2024.
One way Boeing is trying to improve quality is to only accept airframes that are free of defects so that repairs or extra manufacturing steps don’t have to be done out of sequence, thus reducing erroneous changes.
Boeing faces pressure from investors, airlines, lawmakers, regulators and the public to prove it can improve quality. Bringing Spirit back in-house could lead to a greater focus on quality at Boeing as U.S. lawmakers and regulators increase scrutiny of the jet maker. Boeing spun off operations in Kansas and Oklahoma in 2005, becoming what is now Spirit AeroSystems.
Boeing accounted for about 70% of Spirit’s revenue last year, with about a quarter coming from producing parts for Boeing’s main rival Airbus, according to a securities filing.
The Federal Aviation Administration said it would not let Boeing expand production until it was satisfied with its production lines.
Chief Executive Dave Calhoun said in March he would resign by the end of the year, and lawmakers blasted the company’s safety record at a Senate hearing in June, with some senators expressing concern about two fatal incidents. The Max regretted the lack of improvements after the accident.
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