Spirit AeroSystems to be acquired by Boeing in a $4.7 billion deal.

• In March, Boeing announced that it was in discussions to purchase fuselage manufacturer Spirit AeroSystems.
• A leadership shake-up at Boeing occurred after a door panel blew out midflight from a nearly new Boeing 737 Max 9 jet, resulting in a deal.
• Boeing's top-selling plane has been plagued with manufacturing issues, which both Spirit and Boeing have struggled to resolve.

The planemaker announced on Monday that it will buy back shares in an all-stock deal, as it has stated that the plan will enhance safety and quality, amid its ongoing manufacturing crises.

In March, Boeing revealed that it was in discussions to acquire Spirit Aerosystems, a Wichita, Kansas-based company that produces fuselages for the 737 and other parts, including sections of Boeing's 787 Dreamliners, just weeks after a fuselage panel blew out midair from a nearly new Boeing 737 Max 9 on an Alaska Airlines flight.

The Max 9 door plug was not securely attached to the aircraft when it was delivered to Boeing months before the January 5 accident, according to a preliminary report from the National Transportation Safety Board.

The most severe issue among the numerous production problems on Boeing planes was the faulty Spirit-made fuselages with misdrilled holes and misconnected fuselage panels.

The door-plug blowout on the Alaska accident has caused a financial hit for both Spirit and Boeing, resulting in a slowdown of Boeing's deliveries of new planes and a prediction by its CFO in May that the company would burn cash rather than generate it, with an estimated loss of about $8 billion in the first half of 2024. Boeing's shares have fallen more than 30% this year.

Boeing has attempted to enhance quality by only accepting defect-free fuselages, thereby minimizing the need for repairs or additional manufacturing steps, which can reduce the likelihood of errors.

Boeing is facing pressure from various stakeholders, including investors, airlines, lawmakers, regulators, and the public, to improve its quality. Bringing Spirit AeroSystems back in-house could provide Boeing with a more vigilant approach to quality control as U.S. lawmakers and regulators intensify their scrutiny of the jetmaker. Boeing spun off its operations in Kansas and Oklahoma in 2005, which are now known as Spirit AeroSystems.

Last year, Boeing accounted for approximately 70% of Spirit's revenue, while about a quarter came from producing parts for Airbus's main competitor, according to a securities filing.

Boeing's expansion of production will be halted until the Federal Aviation Administration is content with its production processes.

In a June Senate hearing, CEO Dave Calhoun faced criticism from lawmakers over the company's safety record and the perceived lack of progress in addressing the issue following two deadly Max crashes.

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