After steering major deal, Shanahan, CEO of Boeing supplier, could be next Boeing boss

Shanahan expressed confidence that the deal will be sealed. He doesn’t see a regulatory block, because “this is not anti-competitive.”

And in terms of getting the Airbus side of the deal done, he said “working with the senior leadership for all parties, everyone is aligned and interested in the smooth, quick transition to ensure production system performance.”

Assuming the deal is finalized, analysts said the job then of smoothly merging Spirit’s operations with Boeing’s is not straightforward because each faces its own internal production problems.

“The reintegration of Spirit into Boeing is unlikely to be a silver bullet for either company’s operational issues,” wrote Rob Spingarn of Melius Research.

“Spirit’s issues are due to the loss of institutional knowledge,” he added. “When the 737 Max grounding and pandemic hit, Spirit reduced its head count by about 34% to preserve cash. … Many experienced employees retired or took jobs elsewhere.”

“It will take talent, training, and time to fix Boeing’s and Spirit’s operations rather than a deal,” Spingarn concluded.

Likewise, Peter McNally, global head of analysts at Third Bridge, an equity research firm, cited “the lack of a skilled workforce” at Spirit as compounding the same attrition problem at Boeing, for which the deal can bring “no quick fix.”

“The industrial logic of integrating the supply chain is sound, but the reality could prove more challenging,” he wrote. “For Boeing customers, this is unlikely to bring an immediate fix to the number of planes that can be delivered.”

Shanahan, naturally, is much more optimistic.

He said he has already put in place new technologies in the assembly plants to improve quality. These include cameras used for inspection and “automation or new types of tooling that allow people with less experience to do the job with precision.”

He said his team has already revamped many of the work procedures at Spirit and instituted “deeper training, not in the classroom but out supporting the mechanics” on the factory floor.

“I feel really good about the progress,” Shanahan said. “We’re getting back to being airplane builders, gearheads.”