The intricate three-way deal announced late Sunday night to split Spirit AeroSystems between Boeing and Airbus, returning significant manufacturing facilities to Boeing after two decades, was orchestrated by Spirit AeroSystems CEO Pat Shanahan.
Just four months after Boeing declared its intention to reacquire most of this crucial supplier, Shanahan secured the agreement through direct negotiations with the senior leadership of the aviation industry’s two biggest rivals.
Shanahan, a former top Boeing executive and acting Secretary of Defense under President Donald Trump, was appointed Spirit CEO late last year and was already considered a strong candidate to replace Dave Calhoun as Boeing CEO.
As an engineer and a manufacturing problem solver, Shanahan would be “an inspired choice,” according to veteran aviation analyst Adam Pilarski of consulting firm Avitas, who commented in March.
After securing the Spirit agreement, Shanahan, 62, who spends weekends at his home in Seattle, is perhaps the leading candidate to take over when Calhoun steps down later this year.
READ ALSO: 135 Batches of Medication Recalled Over Cardiac Arrest Risk: FDA
In an exclusive interview Monday with The Seattle Times, Shanahan deflected but didn’t deny interest when asked if he might become Boeing’s CEO.
“It’s not my place to comment on what Boeing might or might not do,” Shanahan replied. “I’ll be keeping my eye on getting this deal done at Spirit.”
Shanahan took control of Wichita, Kansas-based Spirit in October after the previous CEO, Tom Gentile, was fired. At the time, Spirit was losing money, deeply in debt, and facing repeated revelations of quality defects.
READ ALSO: Airbus Signs Agreement with Spirit AeroSystems
A few months later, a midair blowout of a fuselage panel on a Boeing 737 MAX — a fuselage built in Wichita last September, before Shanahan took over — triggered an ongoing crisis at Boeing regarding its quality management.
Boeing’s response included accepting delivery of MAX fuselages at the final assembly plant in Renton only if they were largely complete and defect-free. Unfinished work and defects requiring rework had been disrupting the assembly process in Renton and contributed to the critical installation error that caused the Alaska blowout.
Work at Spirit was drastically slowed, and every fuselage is now carefully inspected before leaving Wichita.
“Our teams have made critical improvements to the quality management system over the past six months,” Shanahan said Monday. “Those improvements will continue.”
“We are making enduring changes, mistake-proofing several critical operations,” he added.
Shanahan contends that the future for both companies will be more secure when Boeing takes back in-house those Spirit units that manufacture the entire MAX fuselage and the forward fuselage of all its other jets, along with other major Boeing components.
“Bringing Boeing and Spirit together will enable greater integration. … It’ll bring together their safety and quality systems and make them better,” Shanahan said. “The new organization will be faster and more nimble.”
“This is a fabulous industry,” he concluded. “I’m proud of playing the role of making it stronger and better.”
Analysts caution against expecting a quick fix. For its part of the deal, Boeing pays $4.7 billion in stock, or $37.25 per share, and also assumes Spirit’s net debt of about $3.6 billion.
Meanwhile, Spirit will pay Airbus $559 million to offload its money-losing facilities making A350 and A220 parts.
Financial analysts were skeptical Monday in their assessment of the deal’s impact on Boeing.
Rob Stallard of Vertical Research Partners summarized it as “good for Spirit, good for Airbus, and less good for Boeing.”
