An Open Letter About the State of Our Business
Recently, the company presented information about Spirit’s financial state to the IAM bargaining committee. The key points of that presentation are being shared here.
As you know, Spirit was severely impacted by the 737 MAX grounding and COVID-19 pandemic. While our revenues are now rising, they are still down by 36% since 2019. Our gross profit – which is our profit after subtracting our production costs from revenues – is down 95% since 2019.
To put it plainly, Spirit has spent more money than we have earned for the past four years. Since 2020, we have lost $1.8 billion in free cash flow, including our projection to again lose cash in 2023.
There are several causes for this, including:
- Customer scheduling problems
- Parts shortages and interrupted access to raw materials
- Skilled labor shortages
- Conditions in the US and abroad (US inflation and banking crisis, Russian/Ukrainian war)
To continue business, the company has borrowed additional money that increased our debt to $3.87 billion, some at interest rates that are nearly triple what they were pre-pandemic. Based on all these factors, our stock price is down more than 70% since 2018.
The point of sharing this information is to help you understand our company’s financial position. This is public information that has been shared with the investment community and the IAM bargaining committee.
Spirit must improve our financial situation and our leadership is confident that we will. As we work to negotiate a fair and equitable contract with the IAM, all of this information has to be taken into account and cannot be ignored.