Boeing announced that it will buy its major supplier Spirit AeroSystems after almost two decades of outsourcing the production of major components for 737 Max, 767, 777, and 787.
The official acquisition of the company will allow Boeing to directly monitor and change the production practices of Spirit.
Boeing to Resolve Quality Problems of Spirit
In a press release, Boeing revealed that it will acquire Spirit with an equity value of around $4.7 billion. The total transaction value is estimated to be $8.4 billion due to the latter's net debt.
"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," said Dave Calhoun, CEO and President of Boeing.
The merger will also include all Boeing-related commercial operations, defense, and aftermarket operations. The acquisition is still subject to approval by regulators and Spirit's shareholders.
Boeing Continues Challenges on 737 Incidents
While Spirit has been facing quality problems, Boeing is also facing some challenges with the unresolved 737 incident.
Several reports of Boeing 737 Max failure have resurfaced after the Federal Aviation Administration (FAA) conducted a probe for the 737 Max 9 jet that blew midair last January. The FAA argued that Boeing has been prioritizing speed over safety.
Calhoun has announced his intention to leave his CEO post once the year ends. Stan Deal, the head of the commercial planes division and responsible for creating 737 Max, retired immediately after the reports blew up.
Boeing has made several changes to its operations in recent months. The company has expanded its training and increased inspections for its 737 factory.
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