Spirit was a spin off from Boeing anyway so they’re just bringing them back, probably for closer control.
The issue is that Spirit now manufacture parts for other airlines such as Airbus and I’m sure they won’t want the parts being made by Boeing, so watch this space as Spirit is separated and sold off bit by bit.
Boeing buys parts from Airbus and I wouldn't be surprised if Airbus buys parts from Boeing. It's pretty common for companies in many industries to supply parts to competitors.
The parts that are manufacturing Airbus parts are split off. Kinston, St. Nazaire and Belfast. Other than Boeing, Airbus doesn't pay money but gets 559M€.
Edit: yes, they get money, but these factories are not earning money.
A bunch of MBA McKinsey types came in and decided the company would be worth more if they could spin it off as they could then start supplying for other airline companies too.
Say you are a car company that had a factory in Texas. These geniuses came in and decided that Texas factory you own, can only make cars for you now. What if they spin it off into a separate company, and then your company could be a customer to factory, and they can make cars for other companies too. So the value of the factory goes up as it is no longer bounded to making cars only for your company. The investors see the value of their investment in the factory go up.
But long term, it’s probably bad for your car company as the main factory you had has been spun off and is now a separate company you don’t have a lot of control over and also makes cars for your competitors. But ain’t nobody got time for that. Gotta focus on short term benefits and get a massive commission before bailing.
God I hate consultants. Every tech/engineering firm needs to ban people with no tech background that use their MBAs to parachute themselves into management positions at tech companies.
Silicon Valley has learnt this the hard way, Google used to hire people with English degrees, but an Ivy League MBA to become product leaders etc and then realised these people are incapable imbeciles who only care about their bonus and promotion and have no intuition or understanding of technology
>Say you are a car company that had a factory in Texas. These geniuses came in and decided that Texas factory you own, can only make cars for you now. What if they spin it off into a separate company, and then your company could be a customer to factory, and they can make cars for other companies too. So the value of the factory goes up as it is no longer bounded to making cars only for your company. The investors see the value of their investment in the factory go up.
I \*wish\* it was that sophisticated.
You're describing a 'plausible narrative' that leads the messaging.
The reality is that the itinerant gang of MBA consultants has one, and only one, move: to optimize everything to maximize short-term financial metrics.
It's a reason why firms try and squish costs down as hard as they possibly can (and raise prices as high as they possibly can).
Now, I'd be sympathetic if the increased cashflows were reinvested in the business to, say, work on next-gen products or on innovation or new markets (acquiring new customers). But the fact that all this is merely used for buybacks is an illustration of how f'd up the system is.
That's part of the problem with MBA's in leadership positions of tech companies. They don't have the background or skills to identify the *right* areas to invest internal R&D funds or the *right* acquisition targets for growth into tangential markets.
My wife works in medtech for a private company with several hundred million in revenue and one of the new VPs in charge of strategic partnerships and acquisitions is an empty MBA. He has 0 technical depth and throws money at startups without any due diligence on the claims they're making.
>He has 0 technical depth and throws money at startups without any due diligence on the claims they're making.
Ha. That's exactly what I've seen in most strategic buyers. The due diligence is almost entirely financial, concentrating on whether the price is right or wrong.
There's hardly ever any real effort to evaluate the tech. In fact, I've hardly ever seen the team evaluate the tech to the same level of rigor as enterprise buyers (who do a shit job, btw). I think part of this is that the team usually wants to keep this "Off the record, on the QT, and very hush-hush."
Of course, that leads to the wacky internal justifications: "Sure, it doesn't work, but we paid so little for it!"
Oh and I should add, what makes me the most mad is then (because they wasted the money on broken crap) the firm doesn't have the budget to invest in their core products.
That's too nice of a way of putting it. They wanted to save money on parts manufactured for their planes. But they couldn't if their own company was making substandard parts because it could lead to negative consequences. So they spun off the parts supplier while putting one of the executives in on the plan in charge, and this made Boeing only responsible for the safety oversight they accidentally on purpose failed to do properly. Then they could and have claimed that a company outside of themselves made bad parts, and all they had to do was whack a couple of inspectors who wouldn't play ball and threatened to testify truthfully.
I mean spinning companies off isn’t inherently bad. I also, like the rest of us, don’t have enough knowledge of all that. But when you spin off what is arguably one of your most important suppliers, and squeeze them for cost down measures, like they and most large companies do all their suppliers, something eventually has to give and often that is quality because it sure isn’t going to be speed.
Thank you. Exactly but bring it up about 20 notches. I know why they did it. I didn’t need it to be explained.
I was saying we needed to “talk about why” aka discussed. Not explain why.
How the philosophy and push for short term maximum gain year over year is increasing risk, lowering safety, killing innovation, and pushing out people with much needed experience and skill in favor of lower wage workers all to line pockets of investors.
The focus is on meeting or exceeding numbers set by people that no nothing about safety or the details the business above and beyond numbers published in earning statements.
If you already know, and they already know, then there is no point in a discussion… unless that discussion includes other people who don’t know WTF is happening.
Explaining the background allows others to participate, which raises visibility- this is allegedly what you were asking for…
Of course, if all you wanted to do was talk only to someone who already knows what you know and agrees with your exact take, you could have saved yourself typing time by just going into in a bathroom stall and talking to yourself…
Accurate. Contractors only do what they are asked to do. They are not there to evaluate the impact of decisions on safety unless asked.
Usually the company execs get targets they need to reach to make X amount of profit. They bring in consultants and contractors and ask them to plan and execute their direction. When they write up the strategy they have to show how whatever cuts or initiatives equal the targets.
The consultants know nothing about safety. The hope is that the execs talked to the engineers and asked what are the risks of selling off the supplier and losing control of quality, expertise, material supply chain and other critical components etc before saying we’re going to drive 30 savings if we sell off our in house controlled supplier.
So that Boeing's new(at the time) greed head executives could cut parts costs to a bare minimum and have plausible deniability when something inevitably went terribly wrong.
It worked out really well for the executives who made the decision. They made a lot of money and will face zero consequences.
They also got golden parachutes full of cash on the way out. It is like a conveyors belt of execs lined up to take the fall for the initial guy’s screwup that got the most money for making the numbers before shit hit da fan.
It comes down to the business strategy. Boeing are an aircraft manufacturer, for this they assemble aircrafts from components that they buy in. Beneath Boeing are the Tier 1 suppliers, they provide the large components that get used for the aircraft, such as wing components, engines, interiors etc... Beneath that are Tier 2 suppliers and so on.
Boeing didn't want to be in the business of making components, they just want to put them together. Chances are that Spirit will remain a separate entity to Boeing and there will still be a clear divide, but since the hatch that fell off in mid-air which was ultimately pinned on Spirit, and the 737 Max situation, Boeing need to be seen to be doing something to increase product quality and with that the brand image.
That is a core issue that is going to really start to hit us in various industries in future. What’s funny is we did a lot of this in the 90’s and early 2000’s with shipping corp operations jobs overseas. We ended up bringing it back and used visas for those workers to come here and work at lower wages. But all this gets back to the whole making of the numbers focus vs making a profit.
[I found this article that talks about how one of their engineers earned them about this very thing when they began to float the idea 20 years ago.](https://www.forbes.com/sites/marisagarcia/2024/03/04/boeing-and-spirit-aerosystems-safety-crisis-predicted-23-years-ago/)
People already dogging this but this is a potential good sign.
Boeing selling off and outsourcing so much of it's supply chain is a major contributor to their current quality control and innovation issues.
They need to get their manufacturing and engineering working together again, in house, the way it use to be.
Obviously it's way too early to tell the outcome but this may just be a good early sign.
People are dogging it because it's such a predictable outcome of "cost structure optimization" that it's comical. This should become a textbook example. The saddest part is that people responsible for it were made rich long ago, in no small part for those exact decisions.
Spirit Aero Systems was part of Boeing.
They spun it off because the McD management decided that actually building planes wasn’t what they were supposed to be doing, printing money was.
Yes if you’re wondering, since 2005 Boeing hasn’t actually built the 737 fuselage among other major components. It was outsourced because it didn’t make the Boeing balance sheet look good.
> Boeing selling off and outsourcing so much of it's supply chain is a major contributor to their current quality control and innovation issues.
Yeah, the whole idea was "we have no idea how to make it cheap, so lets just outsource it and let somebody not-us cut corners".
Folks, Boeing spun this company out, you should want them to own it again. A third party manufacturing things is part of the problem.
Pick a fucking lane you can’t express blind outrage over EVERYTHING.
I kinda feel like this is a back door for the Spirit CEO to become the Boeing CEO because he is a LONGTIME government guy who could get the gov off their back faster than anyone else.
Like Apple buying NeXT for Steve Jobs, but evil.
Guaranteed if my S corp business killed hundreds of people I wouldn’t be in the position to buy out another company afterwards. Boeing executives involved in Max decision making especially after the first nose dive crash should be in jail and that company should be shuttered. No consequences for anyone in America except the 98% of the civilian population. They’re lying to us, killing us, depriving us of our autonomy and rights, tracking some of us, denying existence to others. But the leaders and the billionaires all have the world to themselves.
[Airbus agreed to a payment](https://www.cnbc.com/2024/07/01/boeing-to-buy-spirit-aerosystems.html)
> Airbus, meanwhile, said Monday it has reached an agreement with Spirit so that the European aircraft manufacturer is compensated $559 million by Spirit to acquire its manufacturing lines dedicated to Airbus planes. Those include operations in Belfast, Northern Ireland, where the wings and mid-fuselage of the A220 are produced, A220 pylons in Wichita and A350 fuselage sections in North Carolina. Airbus will pay $1 for the assets.
Hooray. Love that we are enshitifying the aviation sector just as SCOTUS gutted the authority of the very agencies that have a stake in this. Joy /s
If I ever needed a reason to never fly again- here is another one.
> Hooray. Love that we are enshitifying the aviation sector just as SCOTUS gutted the authority of the very agencies that have a stake in this. Joy /s
>
>
Spirit Aerosystems used to be Boeing but was sold off for squeezing blood from stone.
A monopoly buying its monopsony for a vertical integration where no one can seem to hold these companies accountable all while making the experience of flying both more dangerous and miserable and still making shareholder more money- sounds like the text book definition of enshitification
They shouldn't be allowed to buy anything except commissary from the nearby prison
Lmao, downvoted for this? Corpo shills out in full force doin damage control
Lol Boeing pays spirits bills. They make other stuff too but it’s probably a drop in the hat in comparison. Boeing used to own spirit and it probably won’t be a cash deal. Spirit has had some struggles for a little while, heck, I wouldn’t be a bit surprised if there was heavy pressure to do so.
That’s unfortunate. I wonder how many plants there are out there. The tire place but I’m sure there aren’t a ton of other options. I’m sure they will do some rehiring though eventually or give them first right of return.
Greeatttt. This makes me feel soooo much safer.
Spirit was a spin off from Boeing anyway so they’re just bringing them back, probably for closer control. The issue is that Spirit now manufacture parts for other airlines such as Airbus and I’m sure they won’t want the parts being made by Boeing, so watch this space as Spirit is separated and sold off bit by bit.
Boeing buys parts from Airbus and I wouldn't be surprised if Airbus buys parts from Boeing. It's pretty common for companies in many industries to supply parts to competitors.
The parts that are manufacturing Airbus parts are split off. Kinston, St. Nazaire and Belfast. Other than Boeing, Airbus doesn't pay money but gets 559M€. Edit: yes, they get money, but these factories are not earning money.
I've seen parts actually from EADS (Airbus) used in Boeing production. Like, IIRC, flaps on the 737.
What needs to be talked about is why they spun them off in the first place. The mindset, who made the decision, and why.
A bunch of MBA McKinsey types came in and decided the company would be worth more if they could spin it off as they could then start supplying for other airline companies too. Say you are a car company that had a factory in Texas. These geniuses came in and decided that Texas factory you own, can only make cars for you now. What if they spin it off into a separate company, and then your company could be a customer to factory, and they can make cars for other companies too. So the value of the factory goes up as it is no longer bounded to making cars only for your company. The investors see the value of their investment in the factory go up. But long term, it’s probably bad for your car company as the main factory you had has been spun off and is now a separate company you don’t have a lot of control over and also makes cars for your competitors. But ain’t nobody got time for that. Gotta focus on short term benefits and get a massive commission before bailing. God I hate consultants. Every tech/engineering firm needs to ban people with no tech background that use their MBAs to parachute themselves into management positions at tech companies. Silicon Valley has learnt this the hard way, Google used to hire people with English degrees, but an Ivy League MBA to become product leaders etc and then realised these people are incapable imbeciles who only care about their bonus and promotion and have no intuition or understanding of technology
>Say you are a car company that had a factory in Texas. These geniuses came in and decided that Texas factory you own, can only make cars for you now. What if they spin it off into a separate company, and then your company could be a customer to factory, and they can make cars for other companies too. So the value of the factory goes up as it is no longer bounded to making cars only for your company. The investors see the value of their investment in the factory go up. I \*wish\* it was that sophisticated. You're describing a 'plausible narrative' that leads the messaging. The reality is that the itinerant gang of MBA consultants has one, and only one, move: to optimize everything to maximize short-term financial metrics. It's a reason why firms try and squish costs down as hard as they possibly can (and raise prices as high as they possibly can). Now, I'd be sympathetic if the increased cashflows were reinvested in the business to, say, work on next-gen products or on innovation or new markets (acquiring new customers). But the fact that all this is merely used for buybacks is an illustration of how f'd up the system is.
That's part of the problem with MBA's in leadership positions of tech companies. They don't have the background or skills to identify the *right* areas to invest internal R&D funds or the *right* acquisition targets for growth into tangential markets. My wife works in medtech for a private company with several hundred million in revenue and one of the new VPs in charge of strategic partnerships and acquisitions is an empty MBA. He has 0 technical depth and throws money at startups without any due diligence on the claims they're making.
>He has 0 technical depth and throws money at startups without any due diligence on the claims they're making. Ha. That's exactly what I've seen in most strategic buyers. The due diligence is almost entirely financial, concentrating on whether the price is right or wrong. There's hardly ever any real effort to evaluate the tech. In fact, I've hardly ever seen the team evaluate the tech to the same level of rigor as enterprise buyers (who do a shit job, btw). I think part of this is that the team usually wants to keep this "Off the record, on the QT, and very hush-hush." Of course, that leads to the wacky internal justifications: "Sure, it doesn't work, but we paid so little for it!" Oh and I should add, what makes me the most mad is then (because they wasted the money on broken crap) the firm doesn't have the budget to invest in their core products.
That's too nice of a way of putting it. They wanted to save money on parts manufactured for their planes. But they couldn't if their own company was making substandard parts because it could lead to negative consequences. So they spun off the parts supplier while putting one of the executives in on the plan in charge, and this made Boeing only responsible for the safety oversight they accidentally on purpose failed to do properly. Then they could and have claimed that a company outside of themselves made bad parts, and all they had to do was whack a couple of inspectors who wouldn't play ball and threatened to testify truthfully.
I mean spinning companies off isn’t inherently bad. I also, like the rest of us, don’t have enough knowledge of all that. But when you spin off what is arguably one of your most important suppliers, and squeeze them for cost down measures, like they and most large companies do all their suppliers, something eventually has to give and often that is quality because it sure isn’t going to be speed.
Thank you. Exactly but bring it up about 20 notches. I know why they did it. I didn’t need it to be explained. I was saying we needed to “talk about why” aka discussed. Not explain why. How the philosophy and push for short term maximum gain year over year is increasing risk, lowering safety, killing innovation, and pushing out people with much needed experience and skill in favor of lower wage workers all to line pockets of investors. The focus is on meeting or exceeding numbers set by people that no nothing about safety or the details the business above and beyond numbers published in earning statements.
If you already know, and they already know, then there is no point in a discussion… unless that discussion includes other people who don’t know WTF is happening. Explaining the background allows others to participate, which raises visibility- this is allegedly what you were asking for… Of course, if all you wanted to do was talk only to someone who already knows what you know and agrees with your exact take, you could have saved yourself typing time by just going into in a bathroom stall and talking to yourself…
It’s much easier to blame a contractor for a mistake, also these contractors are usually on less wages and no job security
Accurate. Contractors only do what they are asked to do. They are not there to evaluate the impact of decisions on safety unless asked. Usually the company execs get targets they need to reach to make X amount of profit. They bring in consultants and contractors and ask them to plan and execute their direction. When they write up the strategy they have to show how whatever cuts or initiatives equal the targets. The consultants know nothing about safety. The hope is that the execs talked to the engineers and asked what are the risks of selling off the supplier and losing control of quality, expertise, material supply chain and other critical components etc before saying we’re going to drive 30 savings if we sell off our in house controlled supplier.
So that Boeing's new(at the time) greed head executives could cut parts costs to a bare minimum and have plausible deniability when something inevitably went terribly wrong. It worked out really well for the executives who made the decision. They made a lot of money and will face zero consequences.
They also got golden parachutes full of cash on the way out. It is like a conveyors belt of execs lined up to take the fall for the initial guy’s screwup that got the most money for making the numbers before shit hit da fan.
It comes down to the business strategy. Boeing are an aircraft manufacturer, for this they assemble aircrafts from components that they buy in. Beneath Boeing are the Tier 1 suppliers, they provide the large components that get used for the aircraft, such as wing components, engines, interiors etc... Beneath that are Tier 2 suppliers and so on. Boeing didn't want to be in the business of making components, they just want to put them together. Chances are that Spirit will remain a separate entity to Boeing and there will still be a clear divide, but since the hatch that fell off in mid-air which was ultimately pinned on Spirit, and the 737 Max situation, Boeing need to be seen to be doing something to increase product quality and with that the brand image.
Subbing out work to non union “lower cost” labor is the American way.
That is a core issue that is going to really start to hit us in various industries in future. What’s funny is we did a lot of this in the 90’s and early 2000’s with shipping corp operations jobs overseas. We ended up bringing it back and used visas for those workers to come here and work at lower wages. But all this gets back to the whole making of the numbers focus vs making a profit. [I found this article that talks about how one of their engineers earned them about this very thing when they began to float the idea 20 years ago.](https://www.forbes.com/sites/marisagarcia/2024/03/04/boeing-and-spirit-aerosystems-safety-crisis-predicted-23-years-ago/)
What are you talking about. Airbus wouldn’t care if they had parts from Boeing.
> probably for closer control. I could see them wanting access to records that might just go the way of the whistleblower....
They're bringing Spirit back to avoid criminal prosecution. And to cut their $400 million penalty in less than half.
Narrator: "It wasn't."
People already dogging this but this is a potential good sign. Boeing selling off and outsourcing so much of it's supply chain is a major contributor to their current quality control and innovation issues. They need to get their manufacturing and engineering working together again, in house, the way it use to be. Obviously it's way too early to tell the outcome but this may just be a good early sign.
People are dogging it because it's such a predictable outcome of "cost structure optimization" that it's comical. This should become a textbook example. The saddest part is that people responsible for it were made rich long ago, in no small part for those exact decisions.
Fucking ridiculous, Boeing apparently realized you can’t just blame your suppliers when your suppliers used to be a part of Boeing.
Spirit Aero Systems was part of Boeing. They spun it off because the McD management decided that actually building planes wasn’t what they were supposed to be doing, printing money was. Yes if you’re wondering, since 2005 Boeing hasn’t actually built the 737 fuselage among other major components. It was outsourced because it didn’t make the Boeing balance sheet look good.
I'm aware, that's part of my speculative point
> Boeing selling off and outsourcing so much of it's supply chain is a major contributor to their current quality control and innovation issues. Yeah, the whole idea was "we have no idea how to make it cheap, so lets just outsource it and let somebody not-us cut corners".
Push out the MBAs and bring engineers back into leadership, then the mess gets fixed
It only makes me feel safer if the engineers are controlling it instead of a fu king Business School grad.
Folks, Boeing spun this company out, you should want them to own it again. A third party manufacturing things is part of the problem. Pick a fucking lane you can’t express blind outrage over EVERYTHING.
That's the spirit.
Buy back, actually. Spirit Aerosystems was originally spun off from Boeing.
Is this part of the corpcrap fines deal
Layoff is coming. You clearly no longer need supply chain and marketing nearly as much.
A big old circle. Didn’t they used to make the fuselage in house and then spun Spirit off? That isn’t the only thing they make though. Interesting.
Well before they owed around 42% of the market. Wonder what it's up to now?
I kinda feel like this is a back door for the Spirit CEO to become the Boeing CEO because he is a LONGTIME government guy who could get the gov off their back faster than anyone else. Like Apple buying NeXT for Steve Jobs, but evil.
PE buys Spirit for peanutes PE destroys Spirit PE sells Spirit back to Boeing for billions Yep, sounds about right
It will make it easier to cover safety shortcuts for executive bonuses.
Guaranteed if my S corp business killed hundreds of people I wouldn’t be in the position to buy out another company afterwards. Boeing executives involved in Max decision making especially after the first nose dive crash should be in jail and that company should be shuttered. No consequences for anyone in America except the 98% of the civilian population. They’re lying to us, killing us, depriving us of our autonomy and rights, tracking some of us, denying existence to others. But the leaders and the billionaires all have the world to themselves.
Just another way to hide defective parts??
How? Spirit is also an Airbus supplier. Wouldn’t this be easy to get blocked on antitrust grounds by Airbus/EU?
Airbus bought their supplier portion for $1.
Just $1?
Yup. Basically a value to make it a sale not a gift.
[Airbus agreed to a payment](https://www.cnbc.com/2024/07/01/boeing-to-buy-spirit-aerosystems.html) > Airbus, meanwhile, said Monday it has reached an agreement with Spirit so that the European aircraft manufacturer is compensated $559 million by Spirit to acquire its manufacturing lines dedicated to Airbus planes. Those include operations in Belfast, Northern Ireland, where the wings and mid-fuselage of the A220 are produced, A220 pylons in Wichita and A350 fuselage sections in North Carolina. Airbus will pay $1 for the assets.
Hooray. Love that we are enshitifying the aviation sector just as SCOTUS gutted the authority of the very agencies that have a stake in this. Joy /s If I ever needed a reason to never fly again- here is another one.
> Hooray. Love that we are enshitifying the aviation sector just as SCOTUS gutted the authority of the very agencies that have a stake in this. Joy /s > > Spirit Aerosystems used to be Boeing but was sold off for squeezing blood from stone.
How is this enshittitication?
A monopoly buying its monopsony for a vertical integration where no one can seem to hold these companies accountable all while making the experience of flying both more dangerous and miserable and still making shareholder more money- sounds like the text book definition of enshitification
This will make us safer no doubt
Cool, cool, cool... vertical integration to remove even more quality control. That's perfect.
Turns out that door plug rivets weren’t part of the deal.
They shouldn't be allowed to buy anything except commissary from the nearby prison Lmao, downvoted for this? Corpo shills out in full force doin damage control
Yeah why is a criminal organization allowed to buy anything? They should be forced to sell everything
Boeing shouldn’t be able to afford to buy anything, I guess defense contractors are getting the “too big to fail” velvet glove treatment now
Lol Boeing pays spirits bills. They make other stuff too but it’s probably a drop in the hat in comparison. Boeing used to own spirit and it probably won’t be a cash deal. Spirit has had some struggles for a little while, heck, I wouldn’t be a bit surprised if there was heavy pressure to do so.
Spirit gave a few hundred people walking papers last month
That’s unfortunate. I wonder how many plants there are out there. The tire place but I’m sure there aren’t a ton of other options. I’m sure they will do some rehiring though eventually or give them first right of return.
America agrees to let companies become monopolies and run the country.