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Spirit looks to boost Boeing 737 output

Aug 14, 2013 | 01:05 PM | Frank Haflich

Tags  Spirit AeroSystems Holdings, earnings report, Larry Lawson, Boeing, Airbus, Gulfstream Aerospace, Frank Haflich

LOS ANGELES — Spirit AeroSystems Holdings Inc. said it is "working hand-in-hand" with Boeing Co. to increase production rates for Boeing’s 737 beyond its 2014 goal of 42 aircraft per month.

Larry Lawson, president and chief executive officer of Boeing’s largest airframe subcontractor, said Spirit doesn’t "see any major roadblocks" to boosting output on Boeing’s top-selling airliner to 47 per month, according to the transcript of the company’s earnings conference call.

The 737 build rate, currently at 38 per month, is due to rise to 42 per month in the first half of 2014. But Lawson noted that Chicago-based Boeing has said it is "looking forward to a higher build rate" of 47, and Spirit’s conversations with Boeing are focused on this range. Spirit builds the 737 fuselage as well as other wing and propulsion system components.

Toulouse, France-based Airbus SAS said earlier this year that it intends to hold the build rate on its A320 airliner, the 737’s direct competitor, at 42 per month. While this rate is claimed as the highest ever in commercial aircraft history, industry analysts said that by the time the newest versions of the 737 and A320 are in full production by the end of the decade, rates could rise to 50 aircraft or more per month.

Meanwhile, Spirit posted a $209.4-million net loss for the three months ended June 30, in contrast to net income of $34.9 million in the same period last year, due mainly to cost escalations on Savannah, Ga.-based Gulfstream Aerospace Corp. business jet programs, which resulted in a $448-million charge. The write-off came in Spirit’s wing systems business segment, of which $426 million reflected the revised cost projections on the Gulfstream G280 and G650 wings, Lawson said during the conference call.

Spirit recently laid off 360 employees (, July 25) and said it plans to sell its two Oklahoma facilities (, Aug. 6). Lawson said the divestiture is "not a fire sale" and Spirit is committed to selling the facilities as an "ongoing operation."

Spirit’s shipset deliveries totaled 340 in the second quarter, up 10.7 percent from 307 a year earlier. Deliveries to Boeing rose 9.4 percent to 163 and deliveries to Airbus were up 13.7 percent to 158, but shipments for business and regional jets were flat at 19.

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