08 August 2013

Spirit Aerosystems wouldn´t enter into the A350 program if it had to make the decision today

Spirit AeroSystems has started a process to divest two manufacturing sites in Oklahoma that are responsible for potentially more than $1 billion in forward losses announced by the company within the last two years.

It is seemed that GKN and General Dynamics study the decision of Spirit´s new CEO to sell off the wing and subassembly manufacturing sites in Tulsa and McAlester which employ around 3,000 of the company's 16,000 staff.

Spirit last month said it was laying off 360 employees at facilities in Kansas and Oklahoma as a result of continuing cost-cutting measures.

787 and A350 wing components are not fabricated in these two facilities; the production of the Boeing 787 fixed leading edge composite wing component was moved to its Malaysia facility from Spirit's facility in Tulsa (Oklahoma) “to allow the company to make more efficient use of its global manufacturing operations.” And the A350 XWB front wing spar & fixed leading edge are shipped from Spirit’s Kinston facility to Spirit’s European plant in Prestwick, Scotland, where they are integrated into the fixed leading edge to deliver it to the Airbus plant in Broughton.

The ongoing strategic review aims at re-balancing the company's product strategy; the company struggled to keep costs under control with so many development programs ongoing at the same time, especially as some of the programs encountered significant delays downstream of Spirit's role in the supply chain; not only the A350 wing spar but also the Gulfstream G280 & G650 wing programs, the 747-8 wing components, the wing program of the 787 as well as the engine nacelle of the G280.

Since emerging as Spirit AeroSystems in 2004, the company worked diligently to expand its product portfolio beyond its legacy as an exclusive Boeing aerostructures and wing components supplier.

Spirit also became a major supplier on the Airbus A350XWB, shipping the Section 10 centre fuselage and the front spar and fixed leading edge of the wing from a new factory in Kinston, North Carolina.

At the same time, Spirit's strategy emphasised maintaining its positions as a premier member of Boeing's supply chain.

Larry Lawson, Spirit's new chief executive, said he was reviewing all of the company's aircraft programs. "Going forward, we clearly will do a better job of determining what we participate in," he said on a call with analysts, referring to contracts entered into between 2005 and 2007.

The company is open to moving further into the defence business.

Based on the article “Spirit AeroSystems launches divestments, reports new charges” published in Flight Global. And based on the article “Spirit AeroSystems Seeks to Sell Two Plants” published in The Wall Street Journal.

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