Boeing plans $4.7 billion acquisition of Spirit AeroSystems – Washington Examiner
Boeing has announced plans to acquire Spirit AeroSystems for $4.7 billion in an effort to improve aircraft quality and safety amidst increased oversight from Congress, airlines, and the Department of Justice. The deal aims to align production systems and workforce priorities centered on safety and quality. Safety concerns arose after a door blowout incident on an Alaska Airlines 737 Max, leading to increased FAA oversight and a criminal investigation by the DOJ. The acquisition values Spirit at $4.7 billion and includes a plea deal for Boeing related to previous crashes. The FAA is investigating the use of titanium parts with falsified quality documentation in Boeing and Airbus passenger jets. Spirit’s CEO was replaced in October by a former Boeing executive.
Boeing plans $4.7 billion acquisition of Spirit AeroSystems
Boeing plans to acquire Spirit AeroSystems for $4.7 billion, aiming to improve aircraft quality and safety amid increased oversight from Congress, airlines, and the Department of Justice.
“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.
Boeing, based in Arlington, Virginia, formerly owned Spirit AeroSystems, whose headquarters are located in Wichita, Kansas.
“By reintegrating Spirit, we can fully align our commercial production systems, including our Safety and Quality Management Systems, and our workforce to the same priorities, incentives and outcomes — centered on safety and quality,” Calhoun said.
Safety concerns increased after the Jan. 5 blowout of a door on an Alaska Airlines 737 Max at 16,000 feet over Oregon.
Following this incident, the Federal Aviation Administration announced increased oversight of Boeing and Spirit, the supplier of the plane’s fuselage, while the DOJ initiated a criminal investigation.
According to Boeing, this acquisition values Spirit at $4.7 billion in equity, amounting to $37.25 per share, with the total deal valued at approximately $8.3 billion, including Spirit’s reported net debt.
Boeing is under pressure from the DOJ to plead guilty to criminal fraud related to the 2018 and 2019 crashes of its 737 Max jetliners in Indonesia and Ethiopia, resulting in the deaths of 346 people.
Boeing has until the end of the week to accept the offer that involves pleading guilty to a conspiracy charge from 2021, paying a fine, and agreeing to a three-year probation with oversight by an independent monitor.
However, Paul Cassell, an attorney who represents 15 of the victims’ families, told CBS News the proposal is “another sweetheart plea deal” and said the families will “strenuously object” to the deal.
In June, the FAA launched an investigation into the use of titanium parts with falsified quality documentation in Boeing and Airbus passenger jets.
Both Boeing and Airbus have assured the safety of planes with these parts but committed to removing them from jets yet to be delivered to airlines.
In October, Spirit replaced its CEO with Patrick Shanahan, a former Boeing executive who previously served as acting defense secretary in the Trump administration.
“Bringing Spirit and Boeing together will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems,” Shanahan said.
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In addition, the companies announced a deal with Airbus for the acquisition of Spirit’s assets tied to programs overseen by the European aerospace firm.
This agreement will begin once Boeing finalizes its deal with Spirit.
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