What would happen if Boeing acquired Spirit AeroSystems?

WICHITA, Kan. (KSNW) – Boeing is in talks to buy Spirit AeroSystems.

Spirit confirmed a Wall Street Journal report saying, “no assurances can be given that a definitive agreement will be entered into, that any transaction will be consummated, or the timing, terms or conditions of any such transaction.”

Wichita-area leaders say they are in the dark about a deal.

Boeing in talks to buy Spirit AeroSystems, company confirms

Sedgwick County Commissioner Jim Howell worked for Boeing here for 11 years. He said when Boeing left town, it left a lot of hard feelings that many people still feel today.

Howell said he can see it from the perspective that Boeing wants to get in control of the supply chain. He said he would be a little concerned if Boeing leadership was considering taking over Spirit in its entirety. He said the aviation community would welcome them with open arms if a deal goes through.

“Their history with Wichita is fantastic, if they want to add to what we have here, if they want to bring in some offices and have maybe a footprint here in Wichita, along side Spirit, I would love to see that happen,” said Howell.

Analysts tell KSN that if Boeing were to acquire Spirit, it would likely be several years before the impact is seen here in Wichita.

“So when you are talking about what is the impact, it depends on how this deal goes through,” said Senior Contributing Analyst Bruce McClelland with Teal Group.

One possibility could include cuts to layers of management, but McClelland said production and most jobs would likely not be going anywhere.

“I don’t think the 737 production is going anywhere. I don’t see that Boeing is going to be able to move production from Wichita to anywhere else,” he said.

McClelland said if a sale moves forward, Boeing shareholders could see a premium over the existing share price. He believes Boeing is too reliant on the current Spirit workforce to move or make extreme cuts.

So why a possible buy from Boeing? Boeing points to safety concerns.

“We confirm that our collaboration has resulted in preliminary discussions about making Spirit AeroSystems a part of Boeing again,” said Boeing in a statement. “We believe that the reintegration of Boeing and Spirit AeroSystems’ manufacturing operations would further strengthen aviation safety, improve quality and serve the interests of our customers, employees, and shareholders.”

Analysts say any possible sale would likely leave most 737 jobs right here in the Air Capital.

“At the end of the day, you’re going to need 95% of the people, 98% of the people, that are still producing aerostructures for being,” said McClelland.

Howell believes Boeing could be interested in getting a direct handle on the 737 line and supply chain. He thinks the community would be devastated financially if Boeing considered moving Spirit out of the area, adding that many local businesses have a hand in building parts.

“You could not calculate the economic impact. If this was to just disappear all of the sudden, it would be billions of dollars lost for this community,” said Howell.

Howell said that he is confident that Boeing would take the right steps to expand here in Wichita. He says at the end of the day, it is a private-sector discussion and that the county wants to do everything it can to help protect the local workforce.

AP: Boeing confirms it’s in talks to buy Spirit AeroSystems, its key supplier on the troubled 737 Max

Wichita Mayor Lily Wu also spoke out about the news via Facebook:

Of note, Boeing says this is only a preliminary set of talks to take back Spirit and any deal, if a deal is reached, could take many months to pass regulatory hurdles. Still, analysts call this a serious look at Boeing wanting to take back Spirit.

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