Boeing's potential acquisition of aircraft maker Spirit AeroSystems could help stabilize the company's defense business and give it more power in bidding for future military aircraft programs, analysts said. said on Monday.
Following a Wall Street Journal report, Boeing and Spirit confirmed Friday that they are in talks about a possible acquisition.If this move comes to fruition, the two companies will be reunited after nearly 20 years apart. And it comes after a series of troubles with Boeing's 737 MAX commercial aircraft, for which Spirit is a supplier.
“It's like 'Back to the Future,' right?” defense industry analyst Byron Curran told Defense News on Monday. “You're bringing back a part of Boeing that has actually been separated since 2005.
That was the year Boeing sold its Wichita, Kansas, and Oklahoma airframe manufacturing operations to a private equity firm and spun off what would become Spirit.
Spirit AeroSystems currently also operates Boeing's E-7 Wedgetail and P-8 Poseidon, Northrop Grumman's B-21 Raider stealth bomber, Bell's V-280 Valor, and B-52H Stratofortress struts and nacelles as well. is. The company's role in the defense industry is expanding, with defense revenues expected to reach nearly $650 million in 2022 and a goal of reaching $1 billion by 2025.
Boeing acknowledged the potential acquisition on March 1, saying the reunification would “further strengthen aviation safety, improve quality, and serve the interests of our customers, employees, and shareholders.”
Troubles in the MAX aircraft line, most recently in January when a door exploded on an Alaska Airlines flight, have raised new concerns about quality control at Boeing and Spirit.
But Curran said there are more motivations for this potential acquisition, including Boeing's desire to closely monitor its supply chain, control aircraft production rates and address quality issues that have cascading effects. I think it is highly possible.
“We don't buy companies because of one specific event,” Curran said. “This is probably a broader set of instances. … They're talking about what happens when you have quality issues, delays, all the other things that get in the way of spirit and that fundamentally impacts your business ability.” I was aware of giving.
Brian Clark, a senior research fellow at the Hudson Institute, said Boeing should take advantage of the company's desire to increase quality oversight and control over its supply chain so that federal regulators approve the potential deal. He said that there is a possibility that the company's claim could be supported.
“This is a little problematic, especially now, given the quality control issues that go back to Spirit in many ways,” Clark said, but added, “We've seen plenty of examples of quality control gone wrong at Boeing.” He also said. It's missing.
Clark said the acquisition of Boeing Spirit would be an overall (albeit modest) benefit to the defense industry because it would make it easier to improve production facilities and methods.
Spirit “started using new production techniques such as additive manufacturing. They have extensive experience with composite materials for the 787 Dreamliner,” Clark said. “Spirit has a lot of potential to be a fairly high-tech supplier for various programs. It's hard to do that as an independent company because we're not in the business of mass production or high-margin business. .”
The Spirit acquisition would also “contribute to Boeing's stabilization in the defense space” by allowing the company to contribute to more defense programs without becoming a prime contractor.
“As the Department of Defense begins to scale back the number of major manned aircraft programs, that means there is less and less opportunity for Boeing, Lockheed and Northrop to become major players,” Clark said. “This way, Boeing, through Spirit, is able to contribute to programs that might otherwise be shut out.”
In the short term, Mr. Curran said, the Spirit acquisition would give Boeing access to some of the programs the company is working on, such as the B-21 Raider stealth bomber and the Bell V-280 Valor, which it lost to Northrop Grumman in 2015. He said it would be provided to Boeing. Army's future long-range attack aircraft.
Even if Boeing moves forward with a potential Spirit acquisition, Curran could back Boeing with programs already underway or close to signing, such as the Air Force's Next Generation Air Dominance future fighter platform. said it was low.
However, if the military moves forward with subsequent aircraft programs (such as a future Air Force mobility aircraft to replace the C-17 Globemaster and C-130 Hercules, or a successor to the Army's CH-47 Chinook), Spirit will be brought in-house. By placing it there is a possibility that its power will be strengthened. Boeing's position added:
Curran and Clark said they feared the Pentagon and government would oppose Boeing's potential acquisition of Spirit. That's even though federal regulators opposed Lockheed Martin's attempt to buy solid rocket motor manufacturer Aerojet Rocketdyne. They said that unlike the exceptionally narrow solid rocket motor market, there are multiple airframe manufacturers that could remain competitive if Boeing were to acquire Spirit.
Clark said Spirit has branched out a bit, including becoming a supplier to Northrop Grumman's B-21 and partnering with Airbus. But most of the company's business was still tied to Boeing, and in many ways “they remained in Boeing's shadow,” he said.
Curran said the acquisition could be a boon for Spirit President and CEO Pat Shanahan. He is a former acting secretary of defense and prior to that was an executive at Boeing. Boeing Chief Operating Officer Stephanie Pope is considered a potential successor to current Boeing CEO Dave Calhoun, but Curran said Shanahan's experience makes him a new candidate. He said he may be a candidate.
“He's going to bring a completely different flavor than we've seen in recent years,” Curran said.
But the big question is whether these expected improvements in supply management and quality control will materialize if the acquisition goes through, Curran said. It all depends on how Boeing manages Spirit's culture, standards and workforce, he said.
“If this is really the beginning of a safety recovery focused on engineering and manufacturing, that's clearly something they lost along the way, and if this helps then that's a good thing,” Curran said. Ta. “But I'm not saying, 'If Boeing buys Spirit, all our problems will be solved.' It's too early to say that.”
Stephen Losey is Defense News' air warfare reporter. He previously covered leadership and personnel issues for Air Force Times and the Department of Defense, special operations and air combat for Military.com. He traveled to the Middle East to cover U.S. Air Force operations.
