Boeing continues working to finalise a deal to acquire 737 fuselage manufacturer Spirit AeroSystems, and the companies might still come to terms before the end of June.
That is according to Boeing chief financial officer Brian West, who on 23 May reiterated Boeing’s intention to purchase the financially and operationally struggling supplier, saying Boeing – itself struggling in similar ways – remains confident the firms will be stronger together.
“I still believe we can get something signed in the second quarter, but it is a large and complex [deal], and we are not going to rush,” West says during an investor conference hosted by Wolfe Research. “Spirit and Boeing believe reintegrating this business is important on a variety of fronts.”
Boeing in March revealed interest in acquiring Wichita-based Spirit, asserting that doing so would help address quality problems that have long dogged the critical supplier. Boeing in 2005 divested the business that became Spirit.
The discussions come as Boeing faces intense scrutiny following the in-flight blow out of an Alaska Airlines 737 Max 9’s door plug in January.
Spirit supplies 737 fuselages – with door plugs installed – to Boeing in Renton. Workers for Boeing had to remove the Alaska jet’s door plug during the assembly process to allow workers for Spirit to address a problem involving fuselage rivets, investigators have said. Boeing’s workers replaced the plug but apparently failed to bolt it in place.
Analysts have mixed views about whether Spirit’s quality issues might be better addressed under Boeing’s ownership. But they agree such an acquisition would be complicated because Spirit manufacturers major aircraft components for other customers, including Airbus.
Spirit would likely need to divest some or all of that other work as a condition to Boeing’s purchase, analysts suspect.
Asked about potential divestitures on 23 May, West says only that Boeing must give “Spirit time to address” its work for other customers.
“We really believe in the strategic rationale of this transaction,” he adds.
Spirit did not immediately respond to a request for comment.
