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Boeing to acquire Vought share of Global Aeronautica
By Dan McCue
Staff Writer
In a move intended to straighten out lingering supply chain issues related to its high-profile 787 Dreamliner program, The Boeing Co. has agreed to acquire Vought Aircraft Industries’ interest in Global Aeronautica LLC, a joint venture that owns the fuselage subassembly plant in North Charleston.
The acquisition of Vought’s interest in Global Aeronautica came nearly six months after Vought admitted it was one of the weakest links in Boeing’s global supply chain.
After the buyout is complete, Global Aeronautica will become a 50-50 joint venture between Boeing and Alenia North America, a subsidiary of Alenia Aeronautica, Italy’s largest aerospace company.
Terms of the Boeing/Vought deal were not disclosed. The transaction will close following receipt of regulatory approvals.
Lee Kurtz, a spokeswoman for Global Aeronautica said when the closing occurs, “branding” of the North Charleston facility will change from Vought to Boeing.
“This will take several weeks. No management changes have been made,” Kurtz said.
Boeing has consistently cited supplier and assembly issues as the reason the 787 is running nearly a year behind schedule, and financial analysts have been girding for the announcement of another delay, which could push the first test flights of the new passenger aircraft back nearly to the end of the year.
In 2003, when Boeing began naming its supply chain partners for the Dreamliner, the Seattle-based aerospace company had targeted May 2008 as the date for delivery of the first operational Dreamliners to Japan’s All Nippon Airways.
Boeing currently has nearly 900 Dreamliners on order. Analysts now estimate that initial deliveries of the Dreamliner to customers will not take place until the third quarter of 2009.
Boeing spokesperson Yvonne L. Leach said the company was assessing the status of the Dreamliner’s production and would make any changes to the scheduled release of the aircraft after that assessment was completed.
Rating unchanged
In the wake of the deal, the Standard & Poor’s ratings service said Vought’s sale of its stake in Global Aeronautica would not impact the “B” rating the firm has given Vought or the negative outlook it has projected for the aircraft manufacturer.
A “B” rating from the financial services firm suggests a company’s prospects are characterized by a degree of uncertainty and vulnerability.
In a note to investors, Lee Rawlings an aerospace and defense analyst for Morgan Stanley Dean Witter and Co., said the move would provide a new parent for the 787’s “problem child” and would in the end be a net positive for Boeing.
“It allows Boeing more control and oversight — and insight — into an important supplier and some of the issues all of its suppliers are facing to varying degrees,” he said.
“I mean, Vought and Global Aeronautica were not Boeing’s sole problem on this project, they’ve had many headaches, but they’ve been among the most vexing issues in the 787 program,” Rawlings said.
The buyout, he said, represents an “optimal solution” for all concerned, even Vought, which he said will no longer have to expend time and energy on the joint venture.
“Now they’ll be able to focus more management and engineering capability on actually producing the fuselages,” he said.
Despite the hammering from financial analysts, Elmer Doty, president and CEO of Vought Aircraft Industries, said the selling of his company’s interest in Global Aeronautica would have no impact on Vought’s North Charleston facility or its workers.
“It’s going to be a seamless transition,” he said.
Vought employs about 300 at its North Charleston plant and produces two aft fuselage sections for the new, state-of-the-art composite aircraft.
Global Aeronautica also employs about 300 at its North Charleston facility and is responsible for joining and integrating 787 fuselage sections from Vought, Alenia and other structural partners.
The joint venture is also responsible for installing and testing associated systems and applies primer to the fuselage sections.
Even after its uncoupling from Global Aeronautica, Vought will continue to produce the aft fuselage for the 787 at its facility on the campus the two companies share adjacent to Charleston International Airport, the companies said in a joint statement.
“As a partner in the Global Aeronautica joint venture, Boeing will work with Alenia to apply proven lean manufacturing expertise to continue improving the efficiency and productivity of the company’s operations,” said Pat Shanahan, Boeing’s vice president and general manager of the 787 program.
“All three partners in this transaction — Boeing, Vought and Alenia — believe these changes will enable the 787 team to continue to overcome supply-chain challenges of the program,” he said.
Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@scbiznews.com.
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