Boeing announced plans to acquire key supplier Spirit AeroSystems for $4.7 billion, a move that it says will improve plane quality and safety amid increasing scrutiny by Congress, airlines and the Department of Justice.
Boeing previously owned Spirit, and the purchase would reverse a longtime Boeing strategy of outsourcing key work on its passenger planes. That approach has been criticized as problems at Spirit disrupted production and delivery of popular Boeing jetliners including 737s and 787s.
“We believe this deal is in the best interest of the flying public, our airline customers, the employees of Spirit and Boeing, our shareholders and the country more broadly,” Boeing President and CEO Dave Calhoun said in a statement late Sunday.
For people lacking context, Boeing split off and sold their division that became Spriti Aerosystems. The theory at the time was that Boeing’s core competency wasn’t building airplanes, it was managing relationships with other vendors. In particular, the actual plane manufacturing part of the company was undesirable due to perceived poor “Return on Net Assets.” The theory they pitched to shareholders was they should sell off non obviously profitable divisions so they reduced asset liability while keeping the same or better profits.
That was their explanation, of course it was a terrible idea.
Spirit was formed when Boeing sold its Wichita division to investment firm Onex Corporation in 2005.
https://en.wikipedia.org/wiki/Spirit_AeroSystems#History
Lol
Yes let’s consolidate a corrupt industry even further!!!
Pinky promises prices will go down, plebs!
Vertical integration with a supplier that used to be part of Boeing helps make it safer. The whole problem is Boeing has moved further and further away from their suppliers, to the point they don’t pay them up front for development, and they’re literally making their contractors fight each other to come up with the cheapest possible parts.
Anything that moves the needle back the other way is good, but they still have a long way to go.
I don’t have issue with vertical integration per se esp in aviation industry but let’s be real Boeing under current leadership will abuse monopoly power. This is who they are! They have show in 69 times already lol
Fire the board, liquidate the company, start over. The cancer of McDonall Douglas must be excised.
