Spirit AeroSystems, a major supplier for Boeing’s 737 Max fuselage, has been navigating a turbulent financial period. Spirit AeroSystems announced earnings Tuesday, and they were grim. The company suffered a $528 million loss in its most recent quarter on $1.7 billion in revenue.
“Events in the first quarter of 2024 have resulted in significant reductions in projected revenue and cash flows this year,” the company said in a statement accompanying its earnings numbers. Ironically, the revenue number was 19% higher than it was the same time last year. Spirit shares were flat in Wednesday trading.
Spirit, which used to be a division of Boeing until it was spun out in 2005, has been in negotiations to rejoin its former parent company. Those negotiations continue, Avey said. Outgoing Boeing CEO Dave Calhoun has stressed the importance of bringing Spirit’s operations in-house again, especially in order to cut down on “traveled work,” —a practice that has been under criticism following a blowout incident involving a 737 Max 9’s door plug.
On the Spirit earnings call, CEO Ryan Avey (who was put in charge just a couple months before the January blowout) said that the firm was doing everything it could to get out from under Boeing’s mess, but that it would continue to be difficult for a little while. Like Boeing, it has been dealing with an influx of new scrutiny from the Federal Aviation Administration while it tries to improve quality control and safety processes. Avey highlighted that the production system in Wichita conducts 9,000 inspections, and the fuselages delivered to Boeing must adhere to “very exacting tolerances,” where even the skin quality is regulated to within 10 thousandths of an inch. He clarified that the consolidation of inspections ensures a final review in Wichita before the product reaches Boeing.
In spite of the significant loss and the challenges that lie ahead, Avey remains optimistic. “This is a reality of our industry where we have these kinds of disruptions, and we’ll roll up our sleeves and figure out a way,” he stated.
Relevant articles:
– Boeing 737 Max fuselage supplier racks up $528 million quarter loss , Quartz, 05/08/2024
– Boeing supplier Spirit AeroSystems’ cash and inventory woes mount, Financial Times, 05/07/2024
– Whistleblower who worked for Boeing supplier Spirit AeroSystems dies after short illness, Yahoo News UK, 05/07/2024