Boeing in early talks to buy supplier Spirit Aero

investing.com:

By Abhijith Ganapavaram, Allison Lampert and Valerie Insinna

(Reuters) -Boeing said on Friday it was in preliminary talks to buy its former subsidiary Spirit AeroSystems (NYSE:SPR) as the company tries to get control of a sprawling crisis sparked by a Jan. 5 mid-air panel blowout.

The planemaker said in a statement it believes its reintegration with Spirit would strengthen aviation safety and improve quality.

Separately, on Friday, Reuters was the first to report the company told suppliers it was delaying expected increases in plane production as it tries to regain the confidence of the industry and satisfy regulators' desires for better oversight of its safety and quality control systems.

For weeks, Boeing (NYSE:BA) has been reeling from the fallout of the 737 MAX incident when a door plug blew off at 16,000 feet (4,877 meters) above the ground. U.S. aviation regulators have already curbed production and air carriers have been in discussion for more aircraft deliveries with its bigger rival, Airbus.

Reuters reported last month that years of decentralization of Boeing's planemaking capacity — along with an exodus of experienced workers and aggressive cost-cutting — has affected quality. Bringing Spirit back into the fold could address some of those quality issues as it would give Boeing more control over manufacturing.

Spirit was spun off in 2005 and in recent years has struggled with cost pressures and problems that have slowed aircraft deliveries and thinned its balance sheet. The company has hired bankers and has had preliminary discussions with Boeing, the Wall Street Journal reported earlier on Friday.

Such a move could also help Boeing lower Spirit's production costs, a senior industry source told Reuters.