Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier • Hacker News Board

Re: Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier

#11

Post by paganel » Mon, Jul 01, 2024, 7:03 AM UTC

dev-jayson wrote: post #7

code51 wrote: post #6

"in an all-stock deal" https://www.reuters.com/markets/deals/boeing-agrees-deal-buy...

I'm no expert but who in the right mind agrees to getting paid in Boeing stocks?

This is Spirit’s current CEO [1]:

> Patrick Michael Shanahan (…) is a former United States federal government official who served as the acting United States Secretary of Defense in 2019.

which is to say that these are companies that are, in essence, controlled by the US Government when it comes to their strategic future, so in cases like this one here the money involved is of secondary importance.

[1] https://en.wikipedia.org/wiki/Patrick_M._Shanahan

Re: Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier

#12

Post by metabagel » Mon, Jul 01, 2024, 7:03 AM UTC

sofixa wrote: post #4

Jean-Papoulos wrote: post #3

FYI, Spirit was originally part of Boeing. They're walking back a strategy of outsourcing that is said to be one of the causes of their recent QC problems.

It is one of the causes, because Spirit have had numerous serious quality control lapses they've tried to hide (including as trivial and as serious as failing to drill holes properly). But Boeing itself has the same types of issues, so while it will give them more control, there won't be a fundamental change unless Boeing manage to fix their culture, which is highly unlikely in the short term. Especially while they'r…

Trying to assemble planes with non-union workforce was another cause of Boeing’s production quality problems.

Re: Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier

#13

Post by Zafira » Mon, Jul 01, 2024, 7:11 AM UTC

sofixa wrote: post #4

Jean-Papoulos wrote: post #3

FYI, Spirit was originally part of Boeing. They're walking back a strategy of outsourcing that is said to be one of the causes of their recent QC problems.

It is one of the causes, because Spirit have had numerous serious quality control lapses they've tried to hide (including as trivial and as serious as failing to drill holes properly). But Boeing itself has the same types of issues, so while it will give them more control, there won't be a fundamental change unless Boeing manage to fix their culture, which is highly unlikely in the short term. Especially while they'r…

It feels like Boeing divested itself of Spirit to try and avoid the responsibilities of having to manufacture various components, but the awful culture was retained at Spirit and probably made worse by the priorities of its private equity owners.

Re: Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier

#14

Post by Y_Y » Mon, Jul 01, 2024, 7:13 AM UTC

langsoul-com wrote: post #9

dev-jayson wrote: post #7

Earlier quoted context omitted.

I'm no expert but who in the right mind agrees to getting paid in Boeing stocks?

Boeing is 64% of spirits revenue. Without Boeing, they don't exist anyway. Not to mention how Boeing's stock might be down, but they are not going to disappear at all. Just from a strategic standpoint, USA has Boeing, EU Airbus and China has the Chinese Boeing /Airbus. Major aviation companies just aren't created any more, no major government would let their strategic assets fall like that.

China's commercial aerospace manufacturer is Comac, it was founded in 2008.

Re: Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier

#15

Post by cm2187 » Mon, Jul 01, 2024, 7:26 AM UTC

sofixa wrote: post #5

The interesting part of the deal is the parts spun off to Airbus. There are some minor components manufactured for Airbus jets, and then there's the A220 (formerly C-series), which as a designed by Bombardier plane, had production in the former Bombardier factories that were sold to Spirit. Most notably, the wings. Airbus only needs the part of Spirit that relate to them, but Spirit's factories are not organised like…

So then Bombardier will become dependent on Airbus?

Re: Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier

#16

Post by ggm » Mon, Jul 01, 2024, 7:30 AM UTC

Outsourcing is lame, and unwinding outsourcing can cost you money to settle issues with other companies which depend on that outsource agent and have regulatory and competition concerns you have to respect.

Paying Airbus to take their bit of this, is .. well it's strange but then I guess not.

Boeing being Boeing, somebody got a massive KPI for making this outsource happen, then somebody else will get a massive KPI for unwinding it.

Re: Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier

#17

Post by hipadev23 » Mon, Jul 01, 2024, 7:33 AM UTC

dev-jayson wrote: post #7

code51 wrote: post #6

"in an all-stock deal" https://www.reuters.com/markets/deals/boeing-agrees-deal-buy...

I'm no expert but who in the right mind agrees to getting paid in Boeing stocks?

Uhh, it’s a public traded company, you sell the stock if you don’t have faith in the company fixing things.

There are two commercial airline manufacturers in the world and a rapidly growing global population. Boeing has a 10+ year manufacturing backlog of 5600+ aircraft. Airbus has a backlog of about 7500. Both companies produce around 550 commercial units a year.

Re: Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier

#18

Post by JumpCrisscross » Mon, Jul 01, 2024, 7:35 AM UTC

ggm wrote: post #16

Outsourcing is lame, and unwinding outsourcing can cost you money to settle issues with other companies which depend on that outsource agent and have regulatory and competition concerns you have to respect. Paying Airbus to take their bit of this, is .. well it's strange but then I guess not. Boeing being Boeing, somebody got a massive KPI for making this outsource happen, then somebody else will get a massive KPI fo…

> Outsourcing is lame, and unwinding outsourcing can cost you money

Apple (TSMC, Samsung), ARM (all fab), Microsoft (hardware) and NVIDIA (TSMC) each outsource critical parts of their value chains. The opposite of over-outsourcing is NBH syndrome.

Re: Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier

#19

Post by [deleted] » Mon, Jul 01, 2024, 7:36 AM UTC

sofixa wrote: post #5

The interesting part of the deal is the parts spun off to Airbus. There are some minor components manufactured for Airbus jets, and then there's the A220 (formerly C-series), which as a designed by Bombardier plane, had production in the former Bombardier factories that were sold to Spirit. Most notably, the wings. Airbus only needs the part of Spirit that relate to them, but Spirit's factories are not organised like…

[deleted]

Re: Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier

#20

Post by sofixa » Mon, Jul 01, 2024, 7:37 AM UTC

cm2187 wrote: post #15

sofixa wrote: post #5

The interesting part of the deal is the parts spun off to Airbus. There are some minor components manufactured for Airbus jets, and then there's the A220 (formerly C-series), which as a designed by Bombardier plane, had production in the former Bombardier factories that were sold to Spirit. Most notably, the wings. Airbus only needs the part of Spirit that relate to them, but Spirit's factories are not organised like…

So then Bombardier will become dependent on Airbus?

My reading of the situation is that no - Airbus will only take factories that produce components for Airbus planes; Boeing will do the same; and the rest will be spun off.

As an example, the Northern Ireland complex will be split (something the union explicitly didn't want because it's unsuitable for it and will lead to job lesses, according to them)