Boeing finalizes $4.7B acquisition of key 737 Max supplier Spirit AeroSystems

Boeing Completes $4.7 Billion Acquisition of Spirit AeroSystems, Bringing Key Supplier In-House

Boeing has finalized its $4.7 billion acquisition of Spirit AeroSystems, a critical supplier that manufactures fuselages for the aerospace giant’s 737 Max jetliners, the company announced Monday. The deal represents a significant strategic shift for Boeing as it reintegrates a supplier it had previously divested in 2005.

Spirit AeroSystems, based in Wichita, Kansas, has been at the center of Boeing’s manufacturing challenges in recent years. The supplier was involved in building the Alaska Airlines aircraft that experienced a door-panel blowout at 16,000 feet over Oregon in January 2024, an incident that intensified scrutiny of Boeing’s safety practices.

Boeing CEO Kelly Ortberg described the acquisition as a “pivotal moment” for the company’s future. “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,” Ortberg said in a statement.

The acquisition, which has been in development for over a year, marks a significant reversal of Boeing’s long-standing strategy of outsourcing major components of its aircraft manufacturing. This approach had faced growing criticism as quality control issues at Spirit disrupted production schedules and delayed deliveries of popular Boeing models, including both 737s and 787 Dreamliners.

When Boeing initially announced its intention to reacquire Spirit in July, the company framed the move as a crucial step toward improving quality control and safety standards. These concerns had reached a critical point following the Alaska Airlines incident, which although not resulting in serious injuries, raised alarming questions about Boeing’s manufacturing processes.

Investigators with the National Transportation Safety Board later determined that four bolts designed to secure the door panel were missing from the Alaska jet after repair work had been completed at a Boeing facility. This finding intensified concerns about Boeing’s safety culture, which was already under intense scrutiny following two fatal crashes involving 737 Max aircraft.

Those crashes—one off the coast of Indonesia in October 2018 and another in Ethiopia in March 2019—killed 346 people and led to a worldwide grounding of the 737 Max fleet for nearly two years. The U.S. Department of Justice had accused Boeing of misleading regulators about a flight-control system later implicated in both disasters.

The acquisition comes at a pivotal time for Boeing as it attempts to rebuild its reputation. Just last month, the company’s criminal case related to the 737 Max crashes was resolved when a federal judge in Texas approved the Justice Department’s request to dismiss charges as part of a negotiated agreement. Under the terms of that deal, Boeing agreed to pay an additional $1.1 billion in fines, victim compensation, and investments in internal safety and quality improvement measures.

According to Boeing, the total value of the Spirit AeroSystems acquisition is approximately $8.3 billion when accounting for all associated costs and liabilities. The move brings Boeing’s largest provider of spare parts back in-house, potentially offering greater control over the supply chain at a time when the aerospace industry continues to recover from pandemic-related disruptions.

Market reaction to the completed acquisition was positive, with Boeing shares rising 2.2% on Monday as investors appeared to welcome the consolidation effort. Industry analysts have suggested that bringing Spirit’s operations under direct Boeing control could help address the quality issues that have plagued the manufacturer in recent years, though integrating the two companies will likely present significant operational challenges.

As the aerospace industry continues to face heightened regulatory scrutiny, Boeing’s decision to reintegrate Spirit AeroSystems signals a strategic pivot toward greater vertical integration and direct oversight of critical manufacturing processes.