May 2 (UPI) — Spirit AeroSystems said there is “substantial doubt about the company’s ability to continue as a going concern” though Boeing and Airbus are planning to acquire portions of the parts maker.
The company, based in Wichita, Kan., on Friday announced the furlough of 250-350 employees starting on May 12 for one month because of a backlog of parts for two Boeing 737 programs at the Kansas plant, The Wichita Eagle reported.
Spirit spun off from Boeing in 2005 but has been finalizing an agreement with Boeing to be reacquired since July 2024. Also, Boeing’s rival Airbus, headquartered in France, on Thursday agreed to provide the company $200 million in credit until it takes over the operation of work on its planes.
About 70% of Spirit’s business in 2023 came from Boeing.
Spirit Aerospace has factories in other U.S. cities, as well as Britain, France, Malaysia and Morocco.
The company made a quarterly filing with the Securities and Exchange Commission on Tuesday detailing a grim financial picture.
“The Company will require additional liquidity to continue its operations over the next 12 months,” Spirit reported.
The company reported a net loss of $1.51 billion from January to September 2024. Spirit AeroSystems had a loss of $616.2 million in 2023, $545.7 million in 2022 and $540.8 million in 2021.
As of Sept. 26, its debt balance was $4.4 billion, including $426.2 million of debt classified as short-term, and its cash and cash equivalents were $217.6 million.
For nine months, net revenue was $4.7 billion compared with $4.2 billion for the same period in 2023.
In October, Spirit furloughed about 700 employees who work on the Boeing 767 and 777 programs because of slower delivery of Boeing’s 737 Max aircraft amid Boeing machinists’ strike. After the machinists accepted Boeing’s contract offer, Spirit announced the furlough would end Nov. 18.
To improve its situation, the company is issuing securities or debt financing subject to any contract conditions, and restructuring operations to increase efficiency and decrease costs.
“We retain a range of options and levers to address our financial and spacing constraints and are working with our customers on these matters,” Joe Buccino, Spirit Aerospace spokesperson, told KSN-TV.
Besides the strike, Spirit Aerospace blamed higher levels of inventory and contract assets, lower operational cash flows because of fewer deliveries to Boeing, higher factory costs to maintain rate readiness and increases on Boeing’s rising production rates.
Aircraft deliveries have slowed after Boeing implemented stricter inspections to deal with the fallout of a door panel blowout on an Alaska Airlines plane in January 2024.
The Wichita plant was founded as Stearman Aircraft in 1927 before being acquired by the United Aircraft and Transport Corporation in 1929. Boeing acquired it in 1941.
Spirit formed as Mid-Western Aircraft when Boeing sold its operations in Wichita and two other U.S. locations to the investment firm Onex in June 2005. It was renamed Spirit Aerospace a few months later.