For Boeing, Buying Spirit Is Only The Start Of Solving Its Problems

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Jeremy Bogaisky is a senior editor who covers aerospace and defense. He’s written about flying cars, laser weapons, research on wearable technology that protects soldiers and lots of articles about what’s wrong with Boeing. Send tips to jbogaisky@forbes.

Boeing 737 Max fuselages manufactured by Spirit AeroSystems in Wichita, Kansas, are transported on a BSNF train heading west over the Bozeman Pass in Montana en route to the Boeing assembly plant in Renton, Washington.oeing is bringing production of its plane fuselages back in-house. The aerospace giant announced early Monday it had agreed to acquire its largest supplier, Spirit AeroSystems, in an $8.3 billion deal, including debt, 19 years after it had spun out the operation.

CEO David Calhoun touted the deal Monday as “one of the most significant” the company has taken to strengthen quality. “This is an opportunity to bring back critical airplane manufacturing work on Boeing airplanes into our factories – where Boeing and Spirit world-class engineers and mechanics can work seamlessly together, focused on a common mission to build safe and quality airplanes for our customers.

There may be some cost savings from combining the two companies. If Spirit were producing at a full rate of 50 737 fuselages a month, instead of around 30 now, it could earn a profit of roughly $1.5 million on each, Melius Research estimates. Eliminating that markup would save Boeing $900 million a year.

Boeing has expanded its training for new employees, but even the best training is only the start in building airplanes, said Collier. The production rates of planes are low compared to cell phones or cars, so aerospace assembly workers aren’t doing the same repetitive tasks many times a day like their compatriots at higher-volume manufacturers, he said, and tend to perform a broader range of work with more tools.

 

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