Boeing Moves To Take Over Vought

 - July 7, 2009, 7:13 AM

Boeing announced today that it has agreed to acquire the business and operations conducted by Vought Aircraft Industries at its North Charleston, S.C. factory, where it builds the aft fuselage section for the 787 Dreamliner.

Boeing said the deal will accelerate productivity and efficiency within the 787 supply chain.

The Vought facility fabricates and assembles structures, then installs systems, in the mainly composite aft fuselage sections of the 787. After the transaction, Vought will continue its work on other Boeing programs, including other components of the 787 and structures and parts for the 737, 747, 767, 777, C-17 and V-22 at other locations.

“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,” said Scott Carson, president and CEO of Boeing Commercial Airplanes. “In addition, it will bolster our capability to develop and produce large composite structures that will contribute to the advancement of this critical technology.”

In other words, Boeing expects its purchase of Vought will help open a bottleneck in the 787 supply chain. Last year Boeing bought Vought’s half of a joint venture with Italy’s Alenia, Global Aeronautica, which sits adjacent to the plant involved in this latest pending transaction. Global Aeronautica assembles, integrates tests systems for more than half of the 787’s mid-fuselage section.

“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 Vought president and CEO Elmer Doty. “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.”

Under the agreement Boeing will acquire the North Charleston facility, its assets and inventory and will assume operation of the site, and the parties will resolve all matters related to Vought’s prior work on the 787 program. The contract calls for Boeing to pay Vought some $580 million in cash, and release Vought from obligations to repay amounts previously advanced by Boeing. Separately, Boeing entered into new agreements with Vought for work packages on the 737, 777 and 787.

Boeing expects the transaction 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 the 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.