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Boeing in talks to buy Spirit AeroSystems, key 737 Max supplier

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Boeing said Friday it was in talks to regain control of Spirit AeroSystems, a key supplier that provides fuselages for its popular 737 Max planes, including the one involved in a mid-flight blowout earlier this year.

In a statement, Boeing referred to “preliminary discussions” on acquisition of Spirit, a company resulting from a spin-off from Boeing almost two decades ago. There is no guarantee the two sides will reach an agreement, Boeing said.

The company called Spirit’s potential “reintegration” a way to improve safety and quality.

Spirit AeroSystems became a separate entity in 2005 after the split. But Spirit and Boeing remain linked, with Spirit makes about 70 percent of each 737 Max before it is sent to Boeing’s factory in Renton, Washington, for final assembly.

Spirit AeroSystems, a key supplier to Boeing, is under scrutiny following the Alaska Airlines accident

Even before the Alaska Air blowup in January, Spirit was grappling with issues that delayed 737 Max deliveries, including a June labor dispute in which manufacturing workers walked out for a week before a new contract is concluded. In October, Spirit named former Boeing executive Pat Shanahan as CEO.

As part of its increased oversight after the Alaska Airlines crash, the Federal Aviation Administration sent additional inspectors to Boeing and Spirit factories. FAA Administrator Michael Whitaker this week gave Boeing 90 days to develop a comprehensive plan to improve quality control, pledging to hold the company accountable “every step of the way.”

Bringing Spirit back under the Boeing umbrella could help appease regulators, said Richard Aboulafia, managing director at aerospace consulting firm AeroDynamic Advisory.

“This would go a long way toward reducing their supply chain risks and would appear proactive in the minds of regulators,” Aboulafia said. He added, however, that a deal would be “extremely complicated” because Spirit also makes parts for Boeing rival Airbus.

The National Transportation Safety Board’s preliminary report on the Alaska Air explosion found that the bolts intended to hold the door plug in place were installed by Spirit at its Wichita factory before being shipped by train to final assembly at Boeing’s Renton factory. The door plug was removed at Boeing facilities so that further repairs could be made to the fuselage. However, a photo shared by Boeing employees after the door plug was removed shows that three of the four key bolts are missing, and a fourth is not visible.

Spirit had a market capitalization of about $3.3 billion before The Wall Street Journal first reported a potential sale. Spirit shares rose more than 15 percent Friday on the news. Boeing shares fell more than 1 percent.

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