In the face of criminal charges, a leadership shakeup, and a ~50% reduction in plane deliveries, Boeing is bringing a major parts supplier back under its wing.
What happened: Boeing is reacquiring Spirit AeroSystems, one of its main parts suppliers, for $6.5 billion. Spirit — along with its increasingly shaky safety record — has faced heavy scrutiny in recent months over its role in the January Alaska Airlines door panel blowout.
- Last week, the U.S. Justice Department also laid criminal fraud charges against Boeing in connection to two fatal plane crashes in 2018 and 2019.
Catch-up: In 2004, Boeing began outsourcing 70% of the design, engineering, and manufacturing of its 787 Dreamliner modules in an effort to pump out planes quickly and cheaply. Heavy outsourcing has been a key part of the Boeing supply chain ever since.
- Experts say Boeing’s once-stellar safety record has suffered in recent years as it scaled up production, and reliance on subcontractors like Spirit is a major reason.
Why it matters: Bringing Spirit’s operations in-house could boost Boeing’s supply chain and help alleviate its massive backlog of jet orders — delays that have disrupted the entire airline industry. More importantly, it should prevent more doors from flying off of planes.—LA