By Allison Lampert, Kanjyik Ghosh, Tim Hepher and Amanda Ferguson
(Reuters) -Airbus finalised an agreement on Monday to take over some plants from Spirit AeroSystems in a carve-up of the struggling supplier with rival Boeing, as unions raised concerns over politically sensitive jobs in Northern Ireland.
The deal comes almost a year after Boeing agreed to buy back its main fuselage supplier, some two decades after spinning it off for $4.7 billion in stock, while Airbus moved to take on Spirit’s loss-making Europe-focused activities.
The unprecedented coordinated decision between planemakers to prevent a collapse of the world’s largest independent aerostructures supplier follows years of financial pressure on Spirit, brought to a head by Boeing’s recent 737 MAX crisis.
The transfer to Airbus includes plants in Kinston, North Carolina, where Spirit makes a crucial part of the A350 fuselage, and a plant in Belfast, Northern Ireland, that makes carbon-fibre wings for the smaller A220.
Certain activities in Morocco and France are also included, the two companies said.
Airbus said it would also acquire the production of wing components for A320 and A350 jets in Prestwick, Scotland.
Under the deal, Airbus will be compensated for taking on the loss-making production work by a $439 million payment from Spirit, less than the $559 million originally planned because of changes in the overall shape of the deal.
Jefferies analyst Chloe Lemarie said the new payment may not fully offset a “mid-three-digit million euro” drag that Airbus expects on its 2025 cashflow from running the plants.
Even so, shares in the European planemaker rose around 2% as the deal lifted uncertainty about a critical part of the supply chain. Delays from Spirit have slowed A350 passenger jet deliveries and contributed to a freighter development delay.
However, both companies said they expected the complex three-way deal to close in the third quarter rather than mid-year as previously indicated.
Airbus will meanwhile provide new interest-free credit lines worth $200 million to Spirit, the companies said.
BELFAST JOBS
The deal is expected to help stabilise aircraft production but leaves a question mark over part of the home to the former Short Brothers, the world’s oldest planemaker, which was sold first to Canada’s Bombardier then to Spirit and now to Airbus.
Politicians and unions have been urging the government to prevent a break-up of Northern Ireland’s largest manufacturing site, which employs around 3,000 people.
Britain’s largest union, Unite, urged the British government to intervene to secure jobs for its 2,000 non-Airbus workers.
The GMB union pledged to “fight tooth and nail” to protect jobs at the 150-year-old facility.
The site is of particular significance to the region’s mainly Protestant unionist community who long provided the vast majority of workers at Shorts and the neighbouring Harland & Wolff shipyards, which built the Titanic.
Spirit said Airbus would acquire the production of A220 wings in Belfast. In the event a suitable buyer is not found, Airbus would also take over production of the A220 mid-fuselage.
Besides supplying Airbus, Spirit’s Belfast operation makes parts for Bombardier private jets and carries out work in defence and space. It lost $338 million in 2023.
Letters sent this month to employees from Boeing Commercial Airplanes CEO Stephanie Pope and Spirit CEO Pat Shanahan suggest that some of the non-Airbus work in Belfast could go to Boeing.
The decision to move ahead with plans to dismantle Spirit comes as Boeing boosts production of its 737 MAX cash cow following a series of crises that weighed on output.
Spirit Aero, which produces the fuselage for the MAX, raised doubts last year about its ability to continue as a going concern, receiving financial help from both planemakers.
Airbus CFO Thomas Toepfer told shareholders earlier this month the company expected to complete the agreement with Spirit by the end of April and formally close the deal by June 30.
(Reporting By Allison Lampert in Montreal, Kanjyik Ghosh in Bengaluru, Tim Hepher in Paris, Amanda Ferguson in Belfast; Editing by Nivedita Bhattacharjee, Barbara Lewis and Jan Harvey)
