Boeing said on Friday it was in talks to acquire Spirit AeroSystems, a struggling supplier the maker spun off nearly two decades ago that makes the fuselages of the 737 Max jet.
By reabsorbing Spirit, Boeing will seek to rescue and restructure a troubled but important partner that has been plagued by years of losses and quality control problems. Spirit’s problems have also at times limited how quickly Boeing can produce Max planes, its most popular commercial jet.
Bringing back Spirit, one of the company’s key suppliers, would be a major strategic shift for Boeing, which has long relied on outsourcing to build its planes. That strategy has come under increasing scrutiny amid concerns about Boeing’s quality issues.
Both companies have faced intense scrutiny since Jan. 5, when a panel on a 737 Max 9 exploded on an Alaska Airlines flight shortly after takeoff, exposing passengers to deafening wind at 16,000 feet. The pilots operating the plane landed it safely with no serious injuries reported. Experts say the episode could have been catastrophic if it had happened at a higher altitude with passengers moving around the cabin.
The National Transportation Safety Board said in a report last month that the plane appeared to have left a Boeing factory without the bolts needed to hold the panel, known as a door plug, in place. Door plugs are used to cover gaps in the body of an airplane where an emergency exit would have been installed if the jet had the maximum number of seats.
The incident followed two Max 8 plane crashes in 2018 and 2019 that together killed nearly 350 people. Aviation regulators grounded Max planes for nearly two years after those crashes. This crisis cost Boeing about $20 billion.
Acquiring Spirit could allow Boeing to change supplier production policies and practices more easily, something it has been pursuing for some years from abroad. Problems with quality and operations led to a leadership shakeup at Spirit last fall. Patrick Shanahan, a former Boeing employee and senior Defense Department official, took over as Spirit’s CEO.
“We believe that reintegrating the manufacturing operations of Boeing and Spirit AeroSystems will further enhance aviation safety, improve quality and serve the interests of our customers, employees and shareholders,” Boeing said in a statement.
“While there is no assurance that we will be able to reach an agreement,” the company added, “we are committed to finding ways to continue to improve the safety and quality of the airplanes that millions of people depend on every day. .”
But buying Spirit could also cause more problems for Boeing at more factories when regulators require it to improve quality control at its factories. The Federal Aviation Administration this week gave the company 90 days to come up with a plan to address the quality control problems.
Spirit and other companies that make parts of an airplane’s body and wings have faced significant challenges in recent years, said Kevin Michaels, chief executive of AeroDynamic Advisory, a consulting firm.
“It’s a failed market,” he said. “Major aerospace companies lose copious amounts of money.”
Boeing sold Spirit to an investment firm in 2005, part of a campaign to cut costs and focus more on final assembly of the planes. That Toronto-based investment firm Onex later took Spirit public. Spirit soon began earning steady annual profits in the hundreds of millions of dollars.
But the company suffered a setback in the early 2010s, following the financial crisis. Its fortunes improved in the middle of the decade, but Spirit and its peers have suffered more recently, in part because planemakers such as Boeing and Airbus have pressured suppliers to cut costs, even as jets have grown more complex. said Mr. Michaels.
Spirit also took a big hit when regulators grounded its Boeing 737 Max planes after the two crashes. Then, in early 2020, the pandemic disrupted supply chains, helping to drive up material costs. Over the past four years, Spirit has lost $2.5 billion.
Any deal between Boeing and Spirit would have implications for Airbus, Boeing’s biggest competitor in the commercial airplane business, because Spirit also makes parts for Airbus planes. Airbus, which is based in Toulouse, France, declined to comment Friday on whether it would seek to acquire the parts of Spirit that supply it with parts.
Shares of Spirit closed down about 15 percent on Friday after the Wall Street Journal and other news organizations reported that Boeing was in talks to acquire the supplier. Boeing shares fell about 2 percent.
Liz Alderman contributed to the report.
