Storm-hit Boeing supplier to resume partial shipments

905

Spirit AeroSystems, which makes the fuselage for Boeing Co’s 737 and key parts of other planes, said it expects to resume limited production and partial shipments this week after a tornado damaged its Wichita facilities on Saturday and disrupted operations.

Spirit, Boeing’s biggest supplier of structural components, shut down temporarily after the tornado caused severe damage to the company’s infrastructure and buildings, cutting power and gas in Iowa, Kansas, Nebraska and Oklahoma. The company also makes part of the fuselage for Boeing’s high-profile 787 Dreamliner.

Spirit said it was restoring power and water to its buildings, while Boeing assessed the impact of the disruption on its airplane production, Reuters reports.
“In terms of operations, we haven’t made any determination as to when we would go up to full operations, but we still expect to make some shipments to customers this week,” said Spirit spokesman Ken Evans.

He said Spirit employees were told to remain on call for the rest of the week until the facilities are safe to enter. Spirit previously had said its infrastructure was damaged in the storm, but that its production capability was intact.

Boeing said on Monday that it has some cushion in its production system to absorb part of its supply disruption, but the company has not said how long it can produce airplanes at full speed with limited or no supply from Spirit.
“Our focus right now is to understand the impact of the event on Spirit’s production capabilities,” Boeing said in a statement.
“We will then balance that information against our inventory of parts and determine what contingencies we need to take to minimize disruption to production,” the plane-maker said. “We expect to have a plan for the work that needs to be done in place over the next several days.”

Boeing shares were up 2.12 percent to $74.22 on Tuesday after a decline on Monday as aerospace experts predicted only light repercussions for Boeing’s production.
“There’s some short-term disruption, but they should be able to make it good quickly enough,” said Richard Aboulafia, an aerospace analyst at Teal Group, noting that Boeing probably has some fuselages on site and some en route from Wichita.
“Sure, they might miss a delivery or two, or a delivery might be delayed by a few days … but certainly by the end of this year, this will be a completely forgotten event,” he said.

Experts say the 737 program is more vulnerable to production line shocks than the 787 or other airplane programs because of its rapid production pace. Boeing makes 35 737s per month and aims to boost that rate to 42 per month.

Boeing is Spirit’s largest customer. Spirit said 85 percent of its work is for the plane-maker and that it makes parts for all of Boeing’s commercial airplanes. Work on the 737 draws about 50 percent of Spirit’s revenue.

Spirit, a Boeing unit until it was sold in 2005, also makes parts of the upcoming Airbus A350 and A320.