Boeing Eyes Full Acquisition of Struggling Spirit AeroSystems Amid Crucial Financing Talks

Boeing is reportedly close to finalizing a financing agreement with Spirit AeroSystems to provide much-needed financial support to the struggling supplier. This development comes as Spirit AeroSystems grapples with severe financial and production challenges, compounded by four consecutive years of financial losses and a recent liquidity warning. Sources indicate that the agreement might be announced in the coming days, although negotiations remain ongoing.

The Wichita-based supplier, a key manufacturer of structures for Boeing aircraft such as the 737 Max and 787, as well as parts for Airbus planes, is facing a cash depletion of approximately $450 million to $500 million in the last quarter of 2024 and the first half of 2025. As of the last fiscal quarter, Spirit AeroSystems' cash balance stood at $218 million, prompting urgent efforts to bolster liquidity, including seeking customer advance payments.

In addition to tapping into a $350 million bridge loan arranged during Boeing's acquisition agreement, Spirit AeroSystems has already secured prepayments from major clients, including Boeing and Airbus. The financial strain has also led the company to consider furloughs for employees involved in the 737 MAX fuselage project, a measure previously seen with the temporary layoff of 700 workers dedicated to producing components for Boeing's 767 and 777 aircraft.

Spirit AeroSystems' reliance is not solely on Boeing; approximately a quarter of its revenue stems from Airbus projects. Concerns over timely fuselage deliveries have even led Airbus to explore the possibility of providing their own financial assistance to Spirit. A potential disruption to A350 deliveries next year has been noted if these delays persist.

In a broader strategic move, Boeing is advancing towards the complete acquisition of Spirit AeroSystems, anticipated to conclude next year. CEO Kelly Ortberg has reaffirmed Boeing’s commitment to acquiring Spirit AeroSystems through an all-stock transaction by 2025, an indication of Boeing’s strategic interest in stabilizing its supply chain and potentially streamlining operations within its extensive manufacturing network.