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Boeing Agrees to Buy Spirit AeroSystems, a Longtime Supplier

nytimes.com

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

#41

Post by [deleted] »

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.

[deleted]

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

#42

Post by stouset »

hipadev23 wrote: post #17
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?

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.

People don’t seem to understand this simple reality about the stock market. Pessimism or optimism about a company’s future is already priced in. People don’t wait for a company to fail before they start selling.

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

#43

Post by netsharc »

dotancohen wrote: post #37
constantcrying wrote: post #30

Earlier quoted context omitted.

>Outsourcing is lame You can not make a modern airplane without significant outsourcing.

SpaceX famously has almost no outsourcing. And Ford built his empire on vertical integration, all the way down to the mining the ore. Neither are airplane manufacturers, but they represent companies on either side of the complex machine spectrum compared to airplanes.

Ford was last century though, can you do that in this century?

I wonder how far "no outsourcing" goes. Do they make their own nuts and bolts? Even if they do, the metal must've come from a supplier (unless they also have mines). Do they make their own screens, and chips, for the flight controls? Not being cynical/sarcastic, just curious.

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

#44

Post by ahartmetz »

michaelt wrote: post #34
JumpCrisscross wrote: post #29

Spirit went public in 2006 at $26.00 per share, implying a $3.8bn market cap [1]. That’s about $40.50 ($5.9bn) today [2]. This deal is at $37.25 per share, implying a $4.7bn market cap and $8.3bn enterprise value [3]. Spirit’s shareholders got hosed; value was transferred to its lenders. [1] https://www.seattletimes.com/business/spirit-aerosystems-gai... [2] https://www.usinflationcalculator.com/ [3] https://www.ft.c…

> Spirit’s shareholders got hosed; value was transferred to its lenders. If you're gonna invest in an aircraft builder that sometimes forgets to put the bolts in, I think only losing 8% is a pretty good deal.

Yep. And the low price, low quality play in that area is and should stay risky.

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

#45

Post by sofixa »

tankenmate wrote: post #31
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…

Spirit also manufacture carbon composite parts for the A350 in the US.

From the FT article:

> As part of that, Airbus will assume the work that Spirit does for its A220 and A350 aircraft programmes at several sites around the world, including Northern Ireland, the US, France and Morocco.

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

#46

Post by JumpCrisscross »

paganel wrote: post #40
JumpCrisscross wrote: post #25

Earlier quoted context omitted.

> which is to say that these are companies that are, in essence, controlled by the US Government Shanahan was in government for two years under a different administration, after 31 years at Boeing, and then returned to the private sector at the helm of a publicly-traded company. Nothing about this screams “controlled by the U.S. government.”

A high-executive getting appointed as Minister of Defence and then rapidly returning as a CEO of a company which has lots of Government contracts tells me exactly that. Had this happened in Russia or China the Western media would have had no qualms in painting said companies as Government pawns.

> returning as a CEO of a company which has lots of Government contracts

Spirit has negligible government contracts. They supply Boeing, Airbus and Bombardier.

> Had this happened in Russia or China the Western media would have had no qualms in painting said companies as Government pawns

No. If anything, it would have been pitched as quasi-oligarchic.

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

#47

Post by MrBuddyCasino »

JumpCrisscross wrote: post #28
MrBuddyCasino wrote: post #26

Earlier quoted context omitted.

TSMC‘s machines can build any kind of chip, once the masks are there, they have many customers and operate in highly competitive market where you can’t afford to fuck up and you can switch to a competitor more easily. Spirit cannot easily build any airplane part, and it has very few customers and with very low levels of competition, so they can afford to be bad at their job because it is hard to switch suppliers. The…

> Spirit cannot easily build any airplane part, and it has very few customers and with very low levels of competition The first two factors should increase Boeing’s leverage. > cases aren’t comparable Of course they are. They’re all examples of outsourcing. The conclusion is outsourcing isn’t bad per se .

> The first two factors should increase Boeing’s leverage.

No because there isn’t another supplier you can easily switch to. You can see this in the outrageous prices they are able to charge Boeing for parts. With chip fabs you can observe their performance in the marketplace and determine which one is good and which is bad. It makes sense to outsource to them because the know-how and capital requirements have grown beyond to what a single chip designer can reasonably do in-house. Even Intel tries to onboard outside customers to its fabs.

Why would you outsource building a plane wing? They are not standardized but different for each plane, they are huge so you can’t exactly build retoolable conveyer belt production lines and amortize this investment over many models.

The only reason to do this is to safe on labor costs and because you don’t want the hassle of doing it yourself, at which point you have become an OEM that just plugs things together. It is primitive MBA thinking that is ignoring 2nd order effects.

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

#48

Post by inejge »

hipadev23 wrote: post #17
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?

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.

Both companies produce around 550 commercial units a year.

From the 2023 Airbus annual report[1]: ...deliveries rise 11% to 735 aircraft. So in 2022 it would've been 660. Quite a bit more than 550.

[1] https://www.airbus.com/en/investors/financial-results-annual...

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

#49

Post by Brybry »

JumpCrisscross wrote: post #38
Brybry wrote: post #33

Earlier quoted context omitted.

Did you confuse ARM Holdings with AMD/GlobalFoundries?

> Did you confuse ARM Holdings with AMD/GlobalFoundries? No. ARM is fabless. That was an outsourcing innovation not too long ago.

What I was replying to said:

> ARM holdings annoys me. I wish they hadn't stopped doing fab.

~~I thought ARM was always fabless?~~ Edit: I guess I'm somewhat mistaken after reading up on VLSI Technology.

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

#50

Post by dotancohen »

netsharc wrote: post #43
dotancohen wrote: post #37

Earlier quoted context omitted.

SpaceX famously has almost no outsourcing. And Ford built his empire on vertical integration, all the way down to the mining the ore. Neither are airplane manufacturers, but they represent companies on either side of the complex machine spectrum compared to airplanes.

Ford was last century though, can you do that in this century? I wonder how far "no outsourcing" goes. Do they make their own nuts and bolts? Even if they do, the metal must've come from a supplier (unless they also have mines). Do they make their own screens, and chips, for the flight controls? Not being cynical/sarcastic, just curious.

Nuts and bolts are considered COTS items: Commodity Off The Shelf. They are not particular to e.g. the Falcon 9 or Starship. The word Commodity is important here - changing suppliers is relatively simple and there are standards that can be adhered to (but need to be checked, remember CSR-7).

Things like screens and chips are less of a commodity than are aerospace-grade bolts, but if I'm not mistaken many of these components are shared with another Musk company that designs and manufactures automobiles - so they have commodity of scale and a long track record, plus many realworld users to uncover bugs. It might not be the exact same component, but much is shared. One prominent example that was stated explicitly recently was the actuator motors for the Starship flaps - right out of a Tesla.

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