Boeing Co. has agreed to buy back Spirit AeroSystems in a stock deal worth more than $4 billion, a major news organization reports.
The Reuters news agency reported that the boards of the two companies met on Sunday and agreed on the deal, which could be announced as early as Monday.
The acquisition is reportedly an all-stock transaction. Based on Spirit’s current price of $37.25 per share, Reuters calculated the total value of the deal at $4.34 billion.
It has been known for months that Boeing wants to buy back Spirit and with it the aircraft factory in Wichita that Boeing sold 19 years ago.
Although it became a separate company after its sale in 2005, Spirit remained a primary supplier of Boeing fuselages, which are assembled into finished aircraft at Boeing factories in the Seattle area.
Boeing is under pressure to improve quality control after a series of errors cost lives and twice grounded 737 Max jets, a staple of Boeing’s lineup.
The Max was grounded for months in 2019 and 2020 after two overseas airlines suffered a control failure that crashed two planes and killed 346 people.
The planes were grounded again earlier this year after a door plug improperly installed in a Spirit-made fuselage blew out during an Alaska Airlines flight in January. The plug was used to fill a hole where an optional emergency door is installed in some configurations of the plane.
No one was killed in that incident, but it led to intense scrutiny by the Federal Aviation Administration. The FAA reported in March that the agency “found multiple instances where the companies (Boeing and Spirit) allegedly failed to meet production quality control requirements.”
The FAA said it “identified nonconformity issues in Boeing’s manufacturing process control, parts handling and storage, and product inspection.”
The reported sale of Spirit back to Boeing would bring Wichita full circle.
In 2005, the community was thrown into disarray when Boeing, the largest employer in a city that calls itself the aviation capital of the world, sold its massive factory to the investment firm that had founded Spirit.
The sale resulted in the cancellation of labor contracts and massive layoffs, hitting especially hard older, more experienced, better-paid workers who thought they were safe because of Boeing’s long history in Wichita and reputation for taking care of its people.
Spirit took over as the city’s largest employer, recently reporting that it had about 12,000 employees.
The Machinists Union, which represents Spirit line workers in Wichita, reported about a week ago that about 310 workers have been laid off due to delays in Boeing production following the quality control controversy.
