Boeing Supplier Spirit Looks Beyond MAX -- WSJ
November 01 2019 - 3:02AM
Dow Jones News
By Doug Cameron
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (November 1, 2019).
Spirit AeroSystems Holdings Inc. agreed to buy an aircraft
components business from Bombardier Inc., as the supplier works to
expand its customer base beyond Boeing Co.'s troubled 737 MAX.
Spirit is paying $1.1 billion for Bombardier facilities in
Northern Ireland, Morocco and Texas that make parts for the Airbus
SE A320 and A220 jets, helping cushion the disruption from the
grounding and slowed production of the MAX.
Spirit is the largest supplier on the Boeing jet. The company is
making parts and fuselages for 52 MAX aircraft each month, even
though Boeing has cut its production level for the MAX back to 42 a
month.
Chief Executive Tom Gentile told analysts it could remain at
that rate next year -- and maybe into 2021 -- but would prefer
Boeing to freeze output rather than slow production if delays in
securing regulatory approval pushed back the return of the MAX.
Boeing is storing finished jets while it works with regulators
in the U.S. and around the world to approve changes to the
plane.
The MAX was grounded globally in March after the second of two
fatal crashes in some five months. Most MAX suppliers have
continued to provide parts at Boeing's current 42-a-month assembly
rate, even as the company builds up a backlog of more than 300
undelivered planes.
The MAX accounts for an estimated 50% of Spirit's annual sales.
A former Boeing unit, Spirit was spun off in 2006 and remains
heavily tied to work on the workhorse jet and the 787
Dreamliner.
Buying the Bombardier assets, part of the Canadian company's
breakup of its aerospace business, is part of a three-pronged
strategy at Spirit to secure more business at Airbus, expand work
on military aircraft and helicopters and build up non-U.S.
operations.
The purchase of the wing-making facility in Belfast gives Spirit
access to the Airbus A220 program bought from Bombardier as well as
the potential for work on the next generation of single-aisle
jets.
The company said it would continue making fuselages and other
parts for the MAX at the same rate of 52 a month, but the grounding
derailed plans to boost monthly output to 57 in the summer,
weighing on costs and profits.
Spirit said its profit fell to $131 million from $169 million
for the latest quarter, shy of analysts' expectations. Sales rose
6% to $1.92 billion.
Spirit shares closed Thursday up 3.5% at $81.82.
--Colin Kellaher contributed to this article.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
November 01, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Spirit Aerosystems (NYSE:SPR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Spirit Aerosystems (NYSE:SPR)
Historical Stock Chart
From Jul 2023 to Jul 2024