Boeing said Monday it plans to buy Spirit AeroSystems, a supplier it spun off from a subsidiary decades ago, in an all-stock deal for $4.7 billion.
Boeing has outsourced some manufacturing processes to Spirit for years, but the move gives the company increased oversight and control over its manufacturing process amid ongoing scrutiny from federal regulators, lawmakers and the Department of Justice (DOJ) as the company seeks to repair its safety and quality record after a door plug blew off on a Boeing 737 Max 9 during an Alaska Airlines flight in January.
“We believe this transaction is in the best interests of air travelers, airline customers, Spirit and Boeing employees, shareholders and the country at large,” said Boeing President and CEO Dave Calhoun, who announced his intention in March to step down at the end of the year.
Spirit CEO Pat Shanahan, a former Boeing executive who served as acting secretary of defense under the Trump administration, It said in a statement “Combining Spirit and Boeing will enable further integration of the companies’ manufacturing and engineering capabilities, including safety and quality systems.”
Boeing submitted an 11-page plan to the Federal Aviation Administration (FAA) in May to address quality control issues, and federal regulators told The Hill they are committed to working with the aviation giant to ensure those improvements are made.
But the Alaska Airlines accident has reignited concerns about Boeing’s promises to improve safety and quality issues following deadly crashes of Boeing 737 Max 8 planes in 2018 and 2019 that killed 346 people.
The Justice Department said in May that it believed Boeing had violated a deferred prosecution agreement in connection with the crash and that it would decide by July 7 whether to charge the company.
Lawyers representing families of the crash victims said Sunday that the Justice Department is preparing to offer a plea deal to Boeing.
Paul Cassell told The Hill that the potential deal would include a $244 million fine, three years of probation and oversight by an outside monitor, and criticized it as a “sweet deal.”
“This plea agreement makes no acknowledgement of the fact that Boeing’s crimes cost 346 lives and appears to be based on the notion that Boeing did not harm the victims,” Cassell said. “The families will vigorously oppose this plea agreement.”
Calhoun apologized to the victim’s family during an appearance before the Senate Permanent Subcommittee on Investigations last month.
Spirit Airlines also supplies parts to Boeing rival Airbus, which said on Monday it had signed a binding term sheet agreement with the company.
“While there can be no guarantee that a transaction will be completed, all parties involved are working in good faith to move this process forward and complete it as quickly as possible,” Airbus said in a statement.
