Boeing intends to maintain Spirit AeroSystems’ current production contracts for the US military after completing its planned acquisition of the supplier.
The troubled producer of aerostructures is set to be acquired by Boeing under an $4.7 billion agreement announced on 1 July. While much focus has been on Spirit’s commercial aircraft programmes, which include sections and components for both Boeing and Airbus jets, the Wichita-based manufacturer is also a key supplier to major US defence firms.
“Under the terms of the definitive merger agreement, Boeing will acquire Spirit’s Wichita and Tulsa operations, which includes responsibility for current defence programmes at the site,” Spirit representative Joe Buccino told FlightGlobal on 1 July.
Boeing aims to close the deal by mid-2025.
Spirit currently supplies both active-production and new-development acquisition programmes for the US military, including the Northrop Grumman B-21 stealth bomber, Bell V-280 next-generation tiltrotor, Sikorsky CH-53K King Stallion heavy-lift helicopter, Boeing P-8 maritime patrol jet and Boeing KC-46 aerial tanker.
The B-21 and V-280 in particular represent two of the Pentagon’s most-significant aviation modernisation initiatives, with both programmes still in the early development stages. Supply disruptions at such a critical period have the potential to generate significant delays and sharp penalty charges for the prime contractor, particularly on programmes like the B-21 with strict cost control measures in place.
“We are confident [that by] reuniting Boeing and Spirit we will have greater integration and the ability to work together in a quicker, more efficient and streamlined manner,” Buccino says.
However, Spirit is not addressing specific programme concerns, saying it “can’t speak on behalf of Boeing regarding their specific plans for post-transaction closing”.
In a securities filing posted on 1 July, Boeing said the proposed deal ”maintains continuity for key US defence and national security programmes”.
It is not unheard of for prime contractors to act as suppliers to competitors. During a June tour of Boeing’s defence unit headquarters in St Louis, company officials told FlightGlobal they are open to taking on more sub-contracting work, in cases when Boeing is not acting as the original equipment manufacturer.
For now, the defence industry appears to be taking news of the pending Boeing-Spirit deal in stride, at least outwardly.
“A strong and reliable supply chain is critical for the aerospace industry to support national defence,” helicopter-maker Sikorsky said on 1 June. “We will provide any assistance needed by the government in its review process to ensure fair competition and a stable supply chain.”
Spirit assembles complete CH-53K fuselages for Sikorsky, including cockpit and cabin assemblies. Sikorsky is currently on contract to deliver 73 of the three-engined helicopters to the US Marine Corps and Israel.
The total USMC programme of record for the King Stallion covers up to 200 examples of the heavy-lift rotorcraft, making it a significant source of revenue for Sikorsky as the company seeks out new development work.
Northrop and Bell did not immediately respond to a request for comment about Boeing’s pending purchase of Spirit.
There are recent examples of defence-industry mergers being held up by anti-competition concerns among US regulators. A attempted acquisition of rocket motor supplier Aerojet Rocketdyne by Lockheed Martin was blocked by the Federal Trade Commission (FTC) in 2022 over concerns it would give Lockheed an unfair advantage over rival munitions producers.
“If the deal is allowed to proceed, Lockheed will use its control of Aerojet to harm rival defence contractors and further consolidate multiple markets critical to national security and defence,” the FTC said in a January 2022 court filing. Aerojet was eventually purchased by L3Harris, another defence mainstay that was deemed more neutral by regulators.
It remains to be seen if Boeing’s bid to take over Spirit will encounter similar headwinds. The deal will still require approval from US regulators, who have been highly critical of Boeing over quality and safety failures at the company’s assembly sites.
Boeing and rival Airbus have reached a tentative deal that would see Spirit’s operations supplying the French airframer split off from the acquisition, addressing potential competition issues between the duopoly.
Airbus has entered a binding agreement relating to the potential acquisition of Spirit’s A350 fuselage production, which takes place at Kinston in North Carolina and the French city of St Nazaire. It will also take over the A220 wing and central fuselage production activities conducted at Belfast and Casablanca, and pick up the pylon work from Wichita.
