Boeing sells its Texas electronics unit
Roughly 200 local workers in the division will lose their current positions, but Boeing believes it will find jobs for most of them on expanding programs such as the 7E7 and the Multi-Mission Aircraft for the U.S. Navy.
BAE hopes to retain all of the 600 workers at the unit's headquarters in Irving, Texas.
The commercial electronics group designs, manufactures and supports products used on nearly all Boeing commercial airplanes, from flight controls to airframe systems monitors and test equipment.
Boeing's deal with BAE follows its sales of several other operations that make small parts for airplanes.
The company sold its Spokane plant, which manufactured parts such as air ducts and floor panels, to Triumph Group in January 2003.
A wiring plant in Corinth, Texas, was sold to Labinal of France last year, and a military-aircraft parts plant in St. Louis was sold to GKN Aerospace in 1997.
The biggest deal may be yet to come: Earlier this year Boeing said it is in talks to sell its 75-year-old Wichita, Kan., plant, which builds fuselage sections for 737s and components of nearly every other Boeing commercial aircraft.
Boeing believes it is cheaper to buy the parts made in these facilities rather than build the components itself.
Selling the divisions also makes it easier for Boeing to concentrate on design and other high-value services that tend to generate larger profits.
"It falls in with our long-term strategy to focus our attention on large-scale systems integration activities inside Boeing, and allow the extended enterprise to help us with the kinds of component manufacturing subassemblies that consumer electronics produces," said Mary Armstrong, vice president and general manager of Boeing Commercial Airplanes' fabrication division.
BAE will offer jobs to a handful of Puget Sound area engineers who are part of the commercial electronics business.
Boeing will "work very hard to redeploy (the remainder) within job opportunities in the Puget Sound area," said Armstrong.
Both companies declined to disclose the financial terms of the deal.
The consumer electronics unit provided $170 million worth of parts to Boeing in 2003, Boeing said.
As part of the transaction, Boeing will purchase the same parts exclusively from BAE for the next eight years.
BAE, however, will be free to sell the products manufactured in Irving to any interested parties, including Airbus, Boeing's European rival.
Craig Martin, a Boeing spokesman, said the move will expand the business and income opportunities for the commercial electronics unit.
"If you're trapped at Boeing, you can only grow as Boeing grows," Martin said.
The sale has been anticipated for months.
Boeing announced last July that the commercial electronics business was for sale. The only mystery was the timing of the deal and the identity of the buyer.
Boeing expects to complete the sale in the third quarter, which begins today and closes Sept. 30.
David Bowermaster: 206-464-2724 or dbowermaster@seattletimes.com