Boeing-Spirit Merger May Take Some Time

Boeing is wrangling Spirit AeroSystems back into the family but things aren’t going too smoothly at the moment, but they’re confident they can figure things out soon. 

A New York Stock Exchange Notice says trading of Spirit AeroSystems was to be suspended on December 8th, adding a little angst to the market. Boeing had to fulfill certain closing conditions before they can roll Spirit back into the fold, but details on which elements remain unfulfilled are mum so far. 

The halt isn’t anything too unusual, it simply was required to occur before Spirit is acquired and delisted in the future. With a halt, traders can still work with the stock as needed to finish up accounting or settlement, like converting shares, update records, and such work. If the acquisition goes well, it could be completed as early as December 8th. Whether Boeing stock will rise or fall is anyone’s guess – We here at Aero News aren’t much for trading the stuff, we just like flying it! Spirit had some debt, and there are some costs with labor and modernization to eat, as well as the usual acquisition chores to do… but long-term? It could be better. Airbus did similar supplier integration once upon a time, and took a minor dent in the stock price. After a couple years, though, the integration yielded faster, more stable production, so things went further in the green.

It’s a funny thing to those with a long memory in this industry: Once upon a time, the beancounters once crowed about how smart it was to split off the “unprofitable” aerostructures from Boeing, believing they could stick someone else with the boring “manufacturing” part of the job and enjoy the profitable “assembling” part for themselves. Well, we can only hope they were all fired, in the end. It turns out it’s a lot harder to maintain impeccable quality standards when contractors are doing things unsupervised – imagine that! Boeing hasn’t been doing too well themselves, of course, but Spirit hasn't been an A-student either. In recent memory, there have been issues with fitment on the 737 MAX, along with skin defects and shimming issues, and problems with joints on the 787 series. Smaller issues like mis-drilling holes or improper fastener torquing are largely a training and oversight issue, which means Boeing can only really end these problems by doing it all in-house. Getting Spirit back under their control will hopefully banish quality issues once and for all. (We can only hope!)

FMI: www.boeing.com, www.spiritaero.com