On 1 March 2024, it was revealed that Boeing, a leading aircraft manufacturer, is in talks for a takeover of Spirit Aerosystems. Spirit is a key supplier that has been linked to many of Boeing’s recent production issues.
Originally a part of Boeing, Spirit became an independent company in 2005 as part of a cost-saving strategy. Despite this change, Boeing still represents over two-thirds of Spirit’s business. Recently, Boeing has faced issues with its manufacturing, highlighted by an incident in January where a part of one of its planes fell off mid-flight.
An investigation by the US government discovered that the bolts meant to secure the panel were taken out at Boeing’s Washington factory, and had not been replaced. Intriguingly, Spirit had made this part before it was sent to Boeing for final assembly.
The Federal Aviation Administration (FAA) has been looking into Boeing since this incident. This week, the FAA ordered Boeing to develop a detailed plan within 90 days to improve its safety practices. Boeing has already been working closely with Spirit to deal with a series of quality issues which have delayed plane deliveries and resulted in a new CEO at Spirit last year.
In a statement to Reuters, Boeing said, “We believe that the reintegration of Boeing and Spirit AeroSystems’ manufacturing operations would enhance aviation safety, improve quality, and benefit our customers, employees, and shareholders.”
News of the takeover talks boosted Spirit’s shares by over 10% on Friday, taking its market value to more than $3.7 billion. However, Boeing’s shares fell by more than 1% after the news was first reported.
Spirit, which is also reportedly contemplating selling its Northern Irish unit to Airbus, has not commented on these developments. The company employs over 20,600 people globally, including about 3,400 in Belfast and 1,120 in Prestwick.
Vocabulary List:
- Takeover (noun): Acquisition of control over a company.
- Supplier (noun): Person or organization that provides goods or services.
- Production (noun): Manufacturing or creation of goods or services.
- Incident (noun): A noteworthy event or occurrence.
- Bolts (noun): Metal rods with a head used to fasten things together.
- Assembly (noun): Putting parts together to create a whole.
