Boeing to buy Spirit Aero for $4.7 billion in effort to tackle quality lapses
2024.07.01 19:13
(Reuters) -Boeing has agreed to buy back Spirit AeroSystems (NYSE:) for $4.7 billion in stock, ending the near-two-decade independence of the world’s largest standalone aerostructures company.
Boeing (NYSE:)’s arch-rival, Airbus, which became a Spirit customer after Boeing spun it off, will take on the supplier’s loss-making Europe-focused activities in return for hundreds of millions of dollars of compensation.
The deal comes after a cabin panel blow out on a Boeing 737 MAX aircraft in January sprawled into a massive reputational and safety crisis, with regulatory scrutiny on Boeing’s quality lapses.
Here is a timeline of recent issues surrounding the MAX since the crashes in 2018 and 2019:
OCTOBER 2018: A Lion Air MAX plane crashes in Indonesia, killing all 189 people on board.
NOVEMBER 2018: The FAA and Boeing begin evaluating the need for software or design changes to 737 MAX jets following the Lion Air crash.
MARCH 2019: An Ethiopian Airlines MAX crashes, killing all 157 people on board. China becomes the first country to ground the MAX, followed by others including the U.S. Federal Aviation Administration.
APRIL 2019: The FAA forms an international team to review the safety of 737 MAX. Boeing cuts monthly production by nearly 20%.
SEPTEMBER 2019: Boeing’s board creates a permanent safety committee to oversee development, manufacturing and operation of its aircraft.
OCTOBER 2019: Boeing fires Kevin McAllister, the top executive of its commercial airplanes division.
DECEMBER 2020: The company fires CEO Dennis Muilenburg in the wake of the twin crashes.
JANUARY 2020: Boeing suspends 737 production, its biggest assembly-line halt in more than 20 years.
MAY 2020: Boeing resumes 737 MAX production at a “low rate”.
JUNE 2020: Boeing begins a series of long-delayed flight tests of its redesigned 737 MAX with regulators at the controls.
NOVEMBER 2020: The FAA lifts the grounding order, allowing the 737 MAX to fly again.
DECEMBER 2020: Congress passes legislation to reform how the FAA certifies new airplanes, including requiring manufacturers to disclose certain safety-critical information to the regulator.
JANUARY 2021: The European Union Aviation Safety Agency approves the MAX’s return to service in Europe.
MARCH 2021: China’s aviation regulator says major safety concerns with the MAX needed to be “properly addressed” before conducting flight tests.
APRIL 2021: Boeing halts 737 MAX deliveries after electrical problems re-ground part of the fleet.
NOVEMBER 2021: Current and former Boeing directors reach a $237.5 million settlement with shareholders to settle lawsuits over safety oversight of the 737 MAX.
OCTOBER 2022: The FAA tells Boeing that some key documents submitted as part of the certification review of the 737 MAX 7 are incomplete and others need a reassessment.
DECEMBER 2022: Congress agrees to extend a deadline for new standards for modern cockpit alerts stemming from the 2020 legislation after intense lobbying from Boeing.
APRIL 2023: Boeing pauses deliveries of some 737 MAXs to deal with a new supplier quality problem involving non-compliant fittings.
JULY 2023: Boeing’s first delivery of the 737 MAX 7 is delayed to 2024.
AUGUST 2023: Boeing identifies a new 737 MAX supplier quality problem involving improperly drilled holes on the aft pressure bulkhead.
SEPTEMBER 2023: Boeing 737 MAX deliveries fall to their lowest levels since August 2021.
DECEMBER 2023: Boeing makes its first direct delivery of a 787 Dreamliner to China since 2019, seen as a precursor to the country potentially unfreezing deliveries of the 737 MAX.
JANUARY 2024: A mid-air cabin blowout compels Alaska Air (NYSE:) to perform an emergency landing of its recently acquired 737 MAX 9 aircraft, prompting the FAA to ground 171 of these jets and initiate an investigation. The FAA bars Boeing from increasing MAX output, but lifts the grounding of MAX-9s once inspections were completed.
FEBRUARY 2024: The U.S. National Transportation Safety Board published its preliminary report on the Alaska Air incident. According to the investigation, the door panel that flew off the jet mid-flight appeared to be missing four key bolts.
MARCH 2024: The FAA’s 737 MAX production audit found multiple instances where Boeing and supplier Spirit AeroSystems allegedly failed to comply with manufacturing quality control requirements. This came days after Boeing said it was in preliminary talks to buy Spirit.
The crisis may mean Boeing will need more time to hit key financial targets for coming years, its CFO warned. The planemaker also said top boss Dave Calhoun would step down at the end of the year.
APRIL 2024: 737 MAX production falls as U.S. regulators step up factory checks and workers slow the assembly line outside Seattle to complete outstanding work.
May 2024: The U.S. Department of Justice says Boeing breached its obligations in a 2021 agreement that shielded it from criminal prosecution over 737 MAX crashes in 2018 and 2019.
The FAA head says he does not expect the agency will quickly give Boeing the authority to boost 737 MAX production.
June 2024: U.S. senators attack Boeing CEO for the planemaker’s tarnished safety record.
July 1, 2024: Boeing acquires Spirit back in an all-stock deal for $4.7 billion in equity value. The deal comes as Boeing, which had sold Spirit in 2005 to cut costs, attempts to solve its quality hurdles and accelerate jet deliveries.
