Boeing Aquisition to Boost 787 Production
Boeing plans to acquire the business and operations of Vought Aircraft Industries at its North Charleston facility in South Carolina, where Vought builds key aft fuselage and other structures for Boeing’s next-generation 787 Dreamliner.
The US$580 million deal will secure continuity of Vought’s many Boeing-related programs, including other components of the 787, as well as structures and components on the 737, 747, 767, 777, C-17 and V-22 through operations located elsewhere.
Boeing will also forgive about $422 million in advance payments, and has separately entered into new agreements with Vought for other work packages on the 737, 777 and 787.
“We take great pride knowing that we have been able to satisfy the technological and physical demands of the 787 program alongside much larger companies,” said Elmer Doty, president and CEO of Vought Aircraft Industries. “However, the financial demands of this program are clearly growing beyond what a company our size can support. We are pleased that we will continue our 787 involvement at a component manufacturing level, as well as provide ongoing technical capabilities that have helped make Charleston a world-class composite facility.”
Scott Carson, president and CEO of Boeing Commercial Airplanes said: “Integrating this facility and its talented employees into Boeing will strengthen the 787 program by enabling us to accelerate productivity and efficiency improvements as we move toward production ramp-up. “In addition, it will bolster our capability to develop and produce large composite structures that will contribute to the advancement of this critical technology.”
The move follows five setbacks of the 787’s service entry, in part because some suppliers did not complete all their contracted work, leaving Boeing to complete the deficient work. Boeing had previously identified Vought as one of the problem partners, and will now be pushing for increased production at the company’s plant.
The transaction is expected to close in the third quarter following satisfaction of customary closing conditions, including consent from Vought’s lenders.
Once acquired, the North Charleston facility will be managed by Boeing’s 787 program. “We look forward to welcoming the South Carolina team to Boeing and continuing our relationship with Vought to bring the most value to the 787 and our other programs,” said Carson.
Boeing now has orders for 850 Dreamliners valued at $151.1 billion at average list prices, making the composite-built 787 the company’s best-selling new airliner ever. It is the first airliner to have fuselage and wings that are primarily of composite structure.
