How does Boeing’s acquisition of Spirit AeroSystems illustrate a make-or-buy decision?

On December 8, 2025, The Boeing Company (NYSE: BA) completed its $4.7 billion acquisition of Spirit AeroSystems (NYSE: SPR), reversing a 20-year outsourcing decision that began when Boeing spun off its Wichita, Kansas division in 2005. Including Spirit’s debt that Boeing assumed in the transaction, the total value of the deal was approximately $8.3 billion.

Spirit AeroSystems produces fuselages for Boeing’s 737 program as well as major structural components for the 767, 777, and 787 Dreamliner. When Boeing spun Spirit off in 2005, the company pursued an “asset-light” manufacturing strategy, outsourcing the production of major airframe components. For nearly two decades, Spirit operated as Boeing’s largest independent supplier of aerostructures.

The decision to bring Spirit back in-house was driven in part by quality and safety concerns, including the January 2024 door-plug blowout on an Alaska Airlines 737 MAX 9 flight and earlier production quality issues on the 737 and 787 programs. Boeing CEO Kelly Ortberg described the acquisition as a pivotal moment in Boeing’s history. Approximately 15,000 Spirit employees across Wichita, Kansas; Dallas, Texas; Tulsa, Oklahoma; and Prestwick, Scotland, now become Boeing employees. Airbus separately acquired Spirit assets that supply Airbus programs, and Composites Technology Research Malaysia acquired Spirit’s operations in Subang, Malaysia.

In managerial accounting, the choice between producing a component internally and purchasing it from an outside supplier is called a make-or-buy decision (sometimes referred to as an outsourcing decision). Boeing’s reintegration of Spirit represents a real-world “buy” decision being reversed in favor of “make.” While the strategic reasoning in aerospace involves far more than cost, the basic framework is the same: which alternative produces the lowest relevant cost, after considering quality, reliability, and alternative uses of the freed capacity?

View a quick tutorial video about make-or-buy decisions and then answer the following questions.

Discussion Questions

1. What quantitative factors (relevant costs) would Boeing have analyzed when deciding whether to bring Spirit AeroSystems back in-house?
2. What qualitative factors beyond cost may have influenced Boeing’s decision? In your view, which factor was most important?
3. Vertical integration requires significant capital investment and ongoing fixed cost commitments. What risks has Boeing accepted by bringing Spirit back in-house?
4. If you were evaluating a make-or-buy decision, how would you decide whether a specific fixed overhead cost is relevant or irrelevant?
5. Many companies use outsourcing to lower costs. Under what circumstances do you think a company should reverse that decision and bring operations in-house?