Boeing & Airbus have completed their acquisition of Spirit AeroSystems, which each side of the aircraft manufacturer duopoly taking certain things within this.
Such transactions were completed today (December 8), with a new set-up in the world of manufacturing now established.
The American planemaker has taken over the company in it’s entirety, whilst the European planemaker has gone for the assets.
It has been an interesting development to watch over the course of today, as the industry begins to adapt to a new era in production.
Boeing Completes Takeover of Spirit AeroSystems…
Boeing confirmed today that the takeover of Spirit AeroSystems has now been completed.
This preserves the fuselage program for the 737, 767, 777, 787, P-8 and KC-46 aircraft.
Such a transaction also makes Boeing the largest supplier of spare parts in house, raising their global maintenance portfolio significantly.
Kelly Ortberg, President & CEO of The Boeing Company had this to say on the acquisition:
“This is a pivotal moment in Boeing’s history and future success as we begin to integrate Spirit AeroSystems’ commercial and aftermarket operations and establish Spirit Defense”.
“As we welcome our new teammates and bring our two companies together, our focus is on maintaining stability so we can continue delivering high quality airplanes, differentiated services, and advanced defense capabilities for our customers and the industry.”
As a result of this deal, Boeing has also been able to secure the all-important Spirit AeroSystems site in Belfast, and will operate as an independent subsidiary named Short Brothers.
Across this deal, it means that more than 15,000 workers will become Boeing staff, a massive increase in the headcount for the American planemaker.
Airbus Secures Sites, Preserving Supply Chain on their Side…
Airbus, like with Boeing, have been part of the news today surrounding Spirit AeroSystems, but the difference being that the European planemaker has secured assets as opposed to the company as a whole.
The European planemaker has taken ownership of the following assets:
- The site of Kinston, North Carolina, U.S. (A350 fuselage sections), joining as Airbus Aerosystems Kinston;
- The site of Saint-Nazaire, France (A350 fuselage sections), joining as Airbus Atlantic Cadréan;
- The site of Casablanca, Morocco (A321 and A220 components), joining as Airbus Atlantic Maroc Aero;
- The production of A220 wings and A220 mid-fuselage in Belfast, Northern Ireland, becoming Airbus Belfast;
- The production of wing components for A320 and A350 in Prestwick, Scotland, becoming an affiliate named Prestwick Aerosystems;
- The production of A220 pylons, which will be transferred out of Wichita, Kansas, U.S. to the site of Saint-Eloi, Toulouse, France.
Commenting on this move was Florent Massou, Executive Vice President Operations for the Commercial Aircraft business of Airbus:
“This milestone marks a special moment for all of us at Airbus.”
“We are proud to welcome over 4,000 new colleagues, with whom we will embark on a new chapter in our industrial operations by taking on activities of critical importance to our commercial aircraft programmes”.
As stated by Massou, this move has increased the Airbus global headcount by around 4,000 people, meaning a total of 19,000 people have been shifted over to two different manufacturers.
On top of this, Airbus will also receive a compensatory payment of $439 million and aims to receive certain amounts to settle liabilities under the provision of the purchase agreements as well.
What Does This Mean for the Industry Moving Forward?
This move from Airbus & Boeing regarding Spirit AeroSystems is pretty significant.
It represents a consolidation move of aircraft production being brought further in-house, so then the supply chain can be more closely monitored.
Each side has benefitted significantly from this, as it boosts their headcount, offers more production safety and stability, and much more.
From a safety standpoint, it is expected that this will be held to a much higher scrutiny as things are now in-house.
Spirit AeroSystems came into the public spotlight following the incident involving Alaska Airlines flight AS1282, when one of the doors ejected from the Boeing 737 MAX in-flight.
It means that both Airbus and Boeing will be held further accountable for safety standards, with all eyes on the both of them to see what measures will be put in place following this new system of integration.
From a supply chain point of view, this is also a solid move, as they can track everything a lot more closely.
For Airbus, having this control will be very useful, given the problems they have had in trying to meet yearly aircraft deliveries.
On the Boeing perspective, this will also be just as crucial, so then oversight can continue, particularly over the 737 MAX program, which has taken substantial public flak over the last few years as well.
For the aircraft manufacturer duopoly, the move clearly benefits. It builds trust, the supply chain, and safety standards too, but the responsibilities have now increased as a result.
The integration of Spirit AeroSystems into the duopoly will be watched closely, and hopefully will become a case study into acquisitions like this, given a lot of undertones and nuances that have caused this move.
But for now, all we can do is sit and wait to see what happens next.
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