Spirit Aero Sees Short-Term Delays Amid Tornado Repair
Spirit AeroSystems Holdings Inc. (SPR), a fuselage supplier to Boeing Co. (BA), projected short-term delivery delays after a tornado that damaged its Wichita, Kansas, plant left production equipment mostly unaffected.
The 45-building complex remains closed at least through tomorrow for damage evaluation, and Spirit said it will work with customers to minimize late shipping of orders. No cost estimate for damage had been made as of yesterday, Ken Evans, a spokesman, said by telephone.
“There is damage to multiple buildings, primarily roofs and walls, but no damage to product that we’ve seen,” Evans said. “We’ve done a pretty significant inventory and do believe that a majority of our production capability is intact.” The plant will probably reopen in zones, he said.
Spirit, which has 10,800 employees in Wichita, builds the entire fuselage for Boeing’s single-aisle 737 and sections of every other Boeing airliner. At the Chicago-based planemaker’s request, it’s boosting production of 737 airframes by about a third through 2014 to accommodate demand for the world’s most widely flown jet.
Spirit fell 1.5 percent to $24.05 at the close of regular trading in New York. Boeing dropped 0.3 percent to $72.68.
The 737 fuselage accounts for 50 percent of Spirit’s revenue and the company is producing 35 per month, Evans said. A tornado in 1991 was the last time the company’s factories were damaged by a twister, he said.
“If delays of a few weeks are in the ballpark, we would expect Spirit to implement temporary solutions to get production back up and to ‘catch up’ through extra shifts/workdays over weeks or a few months,” Carter Copeland and Joseph F. Campbell, aerospace analysts with Barclays Plc in New York, said in a note today.
Spirit was sold by Boeing to buyout firm Onex Corp. in 2005, and shares were sold to the public in 2006. While the supplier also makes parts for other manufacturers, including Airbus SAS (EAB), Boeing remains its biggest customer.
Boeing’s own plant in Wichita suffered building damage and doesn’t have power, said Cindy Wall, a company spokeswoman. Employees who aren’t part of the damage assessment team have been instructed to stay home, she said.
The planemaker said earlier this year it would close operations in Wichita, where it has built airplanes since 1929, by the end of 2013 as military projects dry up amid U.S. spending constraints.
Job reductions at the plant, which employs more than 2,160 workers, will begin in the third quarter, Boeing said in January.
Hawker Beechcraft Corp. is operating normally today after sustaining isolated damage to the roof of its Plant IV, Sarah Estes, a company spokeswoman, said in an e-mailed response to questions. No workers were injured, and no aircraft were damaged, Estes said.
Throughout the region, the storm caused more than $280 million of destruction, according to the Wichita Eagle. No one was killed, it said. Sedgwick County in Kansas, where Wichita is located, was declared a disaster area.
More than 100 tornadoes ripped through the U.S. Midwest on the night of April 14, killing at least five people in Oklahoma, leveling buildings and cutting power to thousands, the Associated Press reported.
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