Boeing is fighting fire with fire in reacquiring Spirit Aero (Updated)

Subscription required

By Dan Catchpole


July 1, 2024, © Leeham News: This is an analysis of Boeing's reported $4.7 billion purchase Spirit AeroSystems, as Reuters reported Sunday.

First, let's set the frame.

Boeing seems incapable of doing anything right these days. Even a pre-Farnborough Airshow media briefing by the aerospace giant last week resulted in a reprimand from the National Transportation Safety Board for sharing information about its investigation into the panel blowout on an Alaska Airlines flight on Jan. 5.

The company is bleeding money in its commercial and defense divisions. Boeing could turn around its balance sheet if it could straighten out production for its cash cows—the 737 and 787. Yet somehow, both programs are still struggling.

Boeing's pissed off the Federal Aviation Administration, the NTSB, key members of Congress, some of its biggest customers, and the Machinists union in Washington and Oregon, among others. Its current CEO is a lame duck who helped create the crises overwhelming the company. Potential successors have said they don't want the job. Among the front-runners to succeed David Calhoun is BCA's new CEO Stephanie Pope, who has no production or product development experience and has had few public appearances since she took over BCA in March. There are plenty more problems, but you get the point.

Spirit AeroSystems has been floundering since the COVID-19 pandemic threw the aviation industry into chaos. Since 2020, it has recorded $3.2 billion in net losses, including $617 million posted in the first quarter of this year. Boeing has helped keep the company afloat with financing and price changes.

In short: Boeing is fighting countless fires, and it just bought another one.

Can Boeing fight fire with fire?

To read the rest of the article Login or Subscribe today.