LOS ANGELES Aerospace
contractor Spirit AeroSystems Holdings Inc. has launched
reviews of its major programs as it looks to resolve cost
Spirit, generally regarded as
Boeing Co.s largest airframe subcontractor, posted
first-quarter net income of $81.2 million, up 10.3 percent from
$73.6 million in the same period last year, on revenue that
climbed 13.9 percent to more than $1.44 billion.
"Were looking at all
aspects of the business and were not leaving any element
of it untouched," president and chief executive officer Larry
Lawson said, according to a transcript of an earnings
conference call, including discussions with the companys
major customers, although he didnt give details of the
Wichita, Kan.-based Spirit first
indicated late last year it could attempt to renegotiate some
of its major contracts after writing off $590 million in the
third quarter of 2012 (
amm.com, Oct. 30).
Spirit delivered a total of 336
shipsets in the first quarter159 to Chicago-based Boeing,
157 to Toulouse, France-based Airbus SAS and 20 for business
and regional jetscompared with 303 shipsets in the first
three months of last year.
With Spirits large
commercial aircraft deliveries increasing 8.6 percent in the
first quarter and deliveries across all programs increasing
10.9 percent from a year earlier, Lawson believes the time has
come to engage in "a comprehensive evaluation of the
development programs" at Spirits facilities in Wichita;
Tulsa, Okla.; Kinston, N.C.; and St. Nazaire, France.
Spirit builds center fuselage
frame sections at the North Carolina plant for Airbus new
A350 XWB (extra-wide body) airliner, expected to be the main
direct competitor to the Boeing 787 Dreamliner, and ships them
to St. Nazaire for assembly into the center fuselage barrel for
delivery to Airbus.
Earlier this year, it was
reported that Airbus was considering acquiring the St. Nazaire
operation in order to gain better control of its supply chain,
although neither company has confirmed the reports.
writeoff of $590 million included $163 million in losses
associated with work the company had done for Gulfstream
Aerospace Corp. Senior vice president and chief financial
officer Philip D. Anderson said during the earnings conference
call that Spirit continues to ship to Gulfstream, but he
acknowledged that problems remain in Spirits relationship
with the Savannah, Ga.-based jet manufacturer. While "we do
deliver (and) we do get paid" by Gulfstream, important issues
still must be resolved, he said. "Its not a full payment
at this point, which is one of the challenges."
Operating earnings by
Spirits fuselage business segment jumped 37.8 percent to
$121.4 million in the first quarter on a 15.3-percent increase
in revenue to $717.9 million, and propulsion systems
earnings rose 12 percent to $65.3 million on a 9.1-percent rise
in revenue to $375.3 million. But wing systems operating
earnings fell 12.5 percent to $18.2 million, due in large part
to a pre-tax $15-million forward-loss on the 787 wing related
to "manufacturing cost growth," despite a 15.7-percent increase
in revenue to $343.3 million.