Boeing Sells Three Plants

There’’s been a very curious transaction this week; « a Canadian company bought three Boeing plants in Kansas and Oklahoma »

‘Toronto-based conglomerate Onex Corp. is heading for the potentially turbulent skies of the aviation industry with a $1.2 billion (U.S.) purchase of three Boeing Co. commercial aircraft plants in Kansas and Oklahoma. “We have come together around a vision, to build a stand-alone competitive business with customers from around the world,” Nigel Wright, an Onex managing director, said in a conference call to announce the deal for the three plants yesterday. The deal includes $900 million in cash and assumption of about $300 million in existing debt, according to Onex managing director Seth Mersky. It’’s worth about $1.47 billion (Canadian). “Onex is awfully happy to begin this process. We share a common goal to build a strong, stable, world-class aerospace supplier,” Mersky said. The plants provide Boeing with fuselage and other components for 737, 747, 767 and 777 planes and is a supplier for the 787 Dreamliner.’‘

Toronto Star

What’’s curious is that Onex has no aerospace experience at all. Boeing says the transaction is intended to increase competition. Says Onex’’s chief: ‘’This could have been very advantageous for an aerospace buyer because they could have eliminated cost from administration or engineering functions, but Boeing decided to take a different tack … They decided that the opportunity to build a stand-alone business, and having more suppliers in the market would be better in the long run.

Sounds to me more like an identity crisis in the face of slipping market share thanks to Airbus, but that’’s just my opinion. Boeing Commercial appears to be shrinking and becoming strictly just a designer of airplanes. You have to wonder if it’’s a viable strategy over the long run, but then I’‘m far from being an expert on big bidness.

Naturally, the employees, as usual, may get the shaft. Onex claims that they will be hiring, but two passages in the article stand out. Onex, however, avoided commenting on whether the new company, to be formed to run the plants, will have jobs for all the plants’’ employees.

’”The 9,000 employees of the old plants will have to apply to the new company for jobs. Onex says it intends to hold meetings with employees over the next several days.’

Which is to say here’s an opportunity to weed out ‘undesirables’ and take advantage of Oklahoma and Kansas laws which are hostile to unions.

Regardless of the true intent, forcing an employee to ‘re-apply’ for the job he or she currently holds is insulting and demeaning. Way to get off on the right foot, Onex.