Spirit AeroSystems Targets $2B Growth in Fabrication and Defense
WICHITA, Kan., Oct. 11, 2017 /PRNewswire/ -- At its Investor Day Sept. 27, Spirit AeroSystems (NYSE:SPR) unveiled plans to grow in two key areas: Fabrication and Defense, each of which is expected to exceed $1 billion over the next five years.
Fabrication. Spirit is already one of the largest manufacturers of machined parts in the world, producing more than 38,000 unique parts to support its current aerostructures business.
"There is a huge market for these detailed parts, delivering them directly to original equipment manufacturers," said Spirit President and CEO Tom Gentile. "Fabrication is a good margin business where Spirit has unmatched capability and capacity for both commercial and defense customers."
The company has developed centers of excellence in Wichita for five-axis complex parts and chemical processing. The company also has established a three- and four-axis center of excellence at its McAlester, Okla., facility and is expanding its Malaysia site where it does complex assemblies. Spirit anticipates developing a $1 billion annual business within the next five years by insourcing parts, supplying other tier-one suppliers and expanding business with Spirit's current commercial and military customers. Spirit has named Kevin Matthies as senior vice president of Global Fabrication, reporting to Ron Rabe, senior vice president of Fabrication and Supply Chain. Kevin will work closely with Alan Young, vice president of Wichita Fabrication, to grow the new business.
Defense. Currently, Spirit is supporting the Lockheed/Sikorsky CH-53K helicopter, the Bell Helicopter V-280, the Boeing KC-46A (a military derivative of the 767), the Boeing P-8A (a military derivative of the 737), and has been named as a supplier on the Northrop Grumman B-21 Raider program. Spirit's defense organization is expected to be a $1 billion annual business within the next five years and account for about 10-15 percent of Spirit's revenue.
"Spirit Defense has a very strong value proposition for defense contractors," said Gentile. "Our costs are lower, we have commercial best practices we can apply and we have design-build capabilities that many of our competitors do not have."
Spirit has appointed industry veteran Krisstie Kondrotis as senior vice president of Defense Programs and Business Development, reporting to Duane Hawkins, senior vice president/GM Boeing, Defense, Business/Regional Jet Programs and Global Customer Support.
"The launch of these two new business units and the appointment of Kevin and Krisstie will allow more focus on Spirit's strategic initiatives in Global Fabrication and Defense," said Gentile. "It reflects our determination to achieve the next level of performance as the world's premier aerostructures company and to be a trusted partner to the industry."
On the web: www.spiritaero.com/support-services
On Twitter: @SpiritAero
About Spirit AeroSystems
Spirit AeroSystems designs and builds aerostructures for both commercial and defense customers. With headquarters in Wichita, Kansas, Spirit operates sites in the U.S., U.K., France and Malaysia. The company's core products include fuselages, pylons, nacelles and wing components for the world's premier aircraft. Spirit AeroSystems focuses on affordable, innovative composite and aluminum manufacturing solutions to support customers around the globe. More information is available at www.spiritaero.com.
This press release contains "forward-looking statements" that may involve many risks and uncertainties. Forward-looking statements reflect our current expectations or forecasts of future events. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "aim," "anticipate," "believe," "could," "continue," "estimate," "expect," "goal," "forecast," "intend," "may," "might," "objective," "plan," "predict," "project," "should," "target," "will," "would," and other similar words, or phrases, or the negative thereof, unless the context requires otherwise. These statements reflect management's current views with respect to future events and are subject to risks and uncertainties, both known and unknown. Our actual results may vary materially from those anticipated in forward-looking statements. We caution investors not to place undue reliance on any forward-looking statements. Important factors that could cause actual results to differ materially from those reflected in such forward-looking statements and that should be considered in evaluating our outlook include, but are not limited to, the following: 1) our ability to continue to grow our business and execute our growth strategy, including the timing, execution, and profitability of new and maturing programs; 2) our ability to perform our obligations under our new and maturing commercial, business aircraft, and military development programs, and the related recurring production; 3) our ability to accurately estimate and manage performance, cost, and revenue under our contracts, including our ability to achieve certain cost reductions with respect to the 787 program; 4) margin pressures and the potential for additional forward losses on new and maturing programs; 5) our ability to accommodate, and the cost of accommodating, announced increases in the build rates of certain aircraft; 6) the effect on aircraft demand and build rates of changing customer preferences for business aircraft, including the effect of global economic conditions on the business aircraft market and expanding conflicts or political unrest in the Middle East or Asia; 7) customer cancellations or deferrals as a result of global economic uncertainty or otherwise; 8) the effect of economic conditions in the industries and markets in which we operate in the U.S. and globally and any changes therein, including fluctuations in foreign currency exchange rates; 9) the success and timely execution of key milestones such as the receipt of necessary regulatory approvals and customer adherence to their announced schedules; 10) our ability to successfully negotiate, or re-negotiate, future pricing under our supply agreements with Boeing and our other customers; 11) our ability to enter into profitable supply arrangements with additional customers; 12) the ability of all parties to satisfy their performance requirements under existing supply contracts with our two major customers, Boeing and Airbus, and other customers, and the risk of nonpayment by such customers; 13) any adverse impact on Boeing's and Airbus' production of aircraft resulting from cancellations, deferrals, or reduced orders by their customers or from labor disputes or acts of terrorism; 14) any adverse impact on the demand for air travel or our operations from the outbreak of diseases or epidemic or pandemic outbreaks; 15) our ability to avoid or recover from cyber-based or other security attacks, information technology failures, or other disruptions; 16) returns on pension plan assets and the impact of future discount rate changes on pension obligations; 17) our ability to borrow additional funds or refinance debt; 18) competition from commercial aerospace original equipment manufacturers and other aerostructures suppliers; 19) the effect of governmental laws, such as U.S. export control laws and U.S. and foreign anti-bribery laws such as the Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and environmental laws and agency regulations, both in the U.S. and abroad; 20) the effect of potential changes in tax law, such as those outlined in recent proposals on U.S. tax reform; 21) any reduction in our credit ratings; 22) our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components; 23) our ability to recruit and retain highly-skilled employees and our relationships with the unions representing many of our employees; 24) spending by the U.S. and other governments on defense; 25) the possibility that our cash flows and borrowing facility may not be adequate for our additional capital needs or for payment of interest on, and principal of, our indebtedness; 26) our exposure under our existing senior revolving credit facility to higher interest payments should interest rates increase substantially; 27) the effectiveness of any interest rate hedging programs; 28) the effectiveness of our internal control over financial reporting; 29) the outcome or impact of ongoing or future litigation, claims, and regulatory actions; and 30) exposure to potential product liability and warranty claims. These factors are not exhaustive and it is not possible for us to predict all factors that could cause actual results to differ materially from those reflected in our forward-looking statements. These factors speak only as of the date hereof, and new factors may emerge or changes to the foregoing factors may occur that could impact our business. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. Except to the extent required by law, we undertake no obligation to, and expressly disclaim any obligation to, publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
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