The Story of Aerostructures Supplier Spirit AeroSystems

DALLAS — Yesterday, Reuters reported that Boeing was "nearing a deal to buy back Spirit AeroSystems" (SPR) after the aircraft parts supplier and former Boeing subsidiary met with Airbus for what is described as a "transatlantic breakup."

Soon after the Alaska Airlines (AS) Boeing 737 MAX mid-flight blow out on January 5, Boeing began discussions to buy back SPR to rejig its 737 MAX supply chain in an effort to fix overarching production quality issues.

However, SPR's second-largest client, Airbus was having none of it—you don't want your competitor to build aircraft part for your newest planes.

Now, according to Reuters' undisclosed sources, it seems that Boeing and Airbus have worked things out, dividing SPR's programs so they cater to each plane maker separately. There's even "a third category of programs that may be sold or dealt with separately."

So, who is Spirit AeroSystems, and how did it become the defacto global aerostructures supplier that it is today?

Beginnings of Spirit AeroSystems

Spirit AeroSystems' history in the U.S. dates back almost a hundred years, when aviation pioneer Lloyd Stearman moved the Stearman Aircraft Company from California to Wichita, Kansas, in 1927. The United Aircraft and Transport Corporation (UATC), later known as Boeing, would purchase Stearman Aircraft Company in 1929.

Iconic aircraft such as the B-29 Superfortress bomber, the B-47 Stratojet and the B-52 Stratofortress rolled out of the Boeing Wichita site during World War II. That's the legacy we're talking about here.

After Boeing's 1996 purchase of Rockwell International’s operations in Oklahoma, the company "produced components for the 737, the International Space Station, the Joint Strike Fighter and the Nimrod MRA4."

In 2005, Boeing sold its Wichita division and Oklahoma operations. The new company, Spirit AeroSystems, began the transformation from a single-source supplier into an independent global supplier with multiple customers and platforms.

Spirit AeroSystems diversified, becoming a supplier for Airbus, which became its second-biggest customer after Boeing.

In 2006, SPR acquired the aerostructures business unit from BAE Systems Aerostructures, formerly Scottish Aviation Ltd (whose roots date back to 1908), including its facilities in Prestwick, U.K.

The European operation became Spirit AeroSystems (Europe) Limited, "one of the largest airframe suppliers to Airbus and is a key supplier of major wing structures."

The Spirit AeroSystems We Know Today

Since its spinoff from Boeing almost 20 years ago, SPR has acquired operations of other leading aerospace companies, expanding company manufacturing and engineering operations globally to become one of the world’s largest tier-one suppliers to OEMs.

Today, SPR has production facilities in Malaysia (2007), France (2009) and North Carolina (2010), as well as sites in Northern Ireland, Morocco and Texas (2020).

The company produces around 70% of Boeing's 737 aircraft, including MAX fuselage involved in the AS blowout. We can recall that right after the accident, Boeing blamed SPR "for sending incomplete or faulty parts to its factories."

In response, SPR said it was "a committed partner with Boeing on the 737 program" and that it would "continue to work together" on improving its production quality. SPR also supplies large parts of the Boeing 787 Dreamliner.

The "strained" relationship between Boeing and SPR and ensuing production issues and aircraft parts disputes have been fodder for aviation analyst for years.

With the buyback, Boeing aims to boost SPR's "industrial resilience" and invest in "digital production systems," according to the Reuters report; in other words, secure the whole production supply chain under one roof as it was in the last century.

The question on everyone's mind is, if the deal goes through, will it be enough for Boeing to return to its former glory?