Analysts predict a potentially successful merger between Boeing and Spirit AeroSystems could substantially boost Boeing’s defense sector. This speculated deal looks set to increase Boeing’s chances in future military aircraft bids and refurbish a severed relationship dating almost two decades back. This discussion arises amidst current issues of Boeing’s 737 MAX civilian aircraft, in which Spirit is a key supplier.
Experts believe the potential integration could prove a recovery path following persistent issues with the 737 MAX. The significant contribution of Spirit to this line of aircraft production might also benefit from the merger. A possible reestablishment of trust and collaboration between the two companies could thus be likely given about two decades of strained relations.
Spirit AeroSystems, a supplier to main aircraft manufacturers worldwide, made significant contributions to military airplanes such as the E-7 Wedgetail and P-8 Poseidon. In 2022, Spirit showed considerable growth, nearing $650 million in revenue. According to defense industry analyst, Byron Callan, this merger could drive significant advancements in both the commercial and defense sectors.
Boeing declared on March 1 that Spirit’s reintegration into their company could enhance aviation safety, overall quality, and benefit their customers, employees, and stockholders. The intended merger might be motivated by aspirations to closely monitor supply chain changes, manage production rates, and rectify quality issues that caused widespread disruption.
Bryan Clark, a senior fellow at the Hudson Institute, suggested that Boeing might use the need for better quality control and greater command over supply chain to advocate for potential acquisition. This could enable Boeing to maintain a stricter level of quality assurance and better control over its supply chain.
Clark also posits that a merger between Boeing and Spirit could slightly benefit the broader defense industry, despite potential antitrust issues and likely regulatory scrutiny. The combination of both entities’ capabilities and resources could help develop new advanced defense technologies. This could as well lead to significant cost savings, improved product performance, and increased competition in the global defense market.
The merger could enable Boeing to contribute to several defense programs without being the primary contractor. With expected reductions in primary manned aircraft programs, this development could present opportunities for Boeing that it otherwise wouldn’t have had.
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