Boeing buys back supplier Spirit in £3.7bn deal in bid to stem safety crisis
Boeing has agreed to buy an aerospace supplier in a deal worth £3.7 billion in a bid to stem an ongoing security crisis.
The airline at the heart of the scandal said the acquisition of Spirit AeroSystems was in the “best interests” of its passengers.
Spirit manufactures and supplies key components for Boeing aircraft, including the wings and main fuselage of the aircraft.
Boeing previously owned the Kansas-based group, but spun it off in 2005 as part of plans to slim down the business.
However, this strategy has come under fire in recent years as Boeing has struggled with a series of safety problems.
Safety scandal: Boeing said acquisition of Spirit AeroSystems was in the ‘best interest’ of its passengers
The group was thrown into crisis in January after a faulty door panel manufactured by Spirit blew a Boeing 737 MAX plane skyward.
The incident, which occurred at 16,000 feet on an Alaska Airlines flight, left passengers in fear and led to all Boeing 737 Max aircraft being grounded.
At the direction of the Federal Aviation Administration (FAA), production was halted and resumed at a reduced level.
Regulators also found more production problems at Spirit. To ease concerns, Boeing will now bring the supplier in-house.
“We believe this deal is in the best interests of the flying public, our airline customers, Spirit and Boeing employees, our shareholders and the country at large,” said Dave Calhoun, Boeing president and CEO.
“By reintegrating Spirit, we can fully align our commercial production systems, including our safety and quality management systems, and our employees with the same priorities, incentives and outcomes, with safety and quality at the core.”
Boeing accounted for about 70 percent of Spirit’s revenue last year, while about a quarter came from Boeing’s biggest rival Airbus.
Under the agreement, Airbus will take over parts of Spirit that manage its own aircraft manufacturing.
Russ Mould, investment director at AJ Bell, said the move “makes sense” for Boeing.
He said: ‘Spirit was the cause of the production errors and safety concerns over its 737 Max plane that sent Boeing’s stock price into a tailspin. This move gives Boeing more control.’
But Boeing still has problems. The U.S. Justice Department has given Boeing a week to admit fraud charges or face a public trial over the deadly crashes of its 737 Max planes in 2018 and 2019.
Boeing is reportedly expected to pay a criminal fine of £192 million and agree to a three-year probation period.
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