Story ID: 
Spirit CEO: Bombardier, Asco Acquisitions Proceeding
By: Jerry Siebenmark
Caption: Spirit AeroSystems sees "long-term value" in acquiring Asco and Bombardier's aerostructures unit, despite the effects of Covid-19 and 737 Max grounding.
Word Count: 348
Spirit AeroSystems plans to proceed with its acquisitions of Asco and Bombardier's aerostructures unit, despite a disastrous financial quarter marked by the continued grounding of the 737 Max, the effects of the Covid-19 pandemic on production rates, and thousands of layoffs. Spirit CEO Tom Gentile reiterated the Boeing supplier’s M&A plans during an earnings call Wednesday morning with analysts.

“We continue to see the long-term strategic value in both the Asco and Bombardier aerostructures acquisitions,” Gentile said. “We intend to close both of these deals if all the conditions are met and we are working closely with both parties on those conditions.” It wasn’t clear what those conditions are or how soon the acquisitions would close.

Gentile said the Asco deal will increase Spirit’s Airbus work—it represents 50 percent of Asco’s revenue. On the defense side, it gives Spirit “key F-35” joint strike fighter work packages, too. The aerostructures acquisition would increase Spirit’s A320 work by adding thrust reversers and enhance its Airbus A220 pylon contract by adding the airplane’s composite wing, which “also adds intellectual property in the form of state-of-the-art resin transfer infusion carbon-fiber composite fabrication…[that] positions us well for future derivatives and next-generation narrowbody aircraft,” Gentile said.

But for now, it will be tough going for the Wichita-based supplier, which will be producing even fewer 737 Max shipsets this year than it earlier expected. Spirit announced in a Securities and Exchange Commission filing Tuesday evening that it had agreed to deliver 125 737 Max shipsets to Boeing instead of the 216 to which the two companies had agreed this year. Spirit is also seeing its monthly rates fall on the 787 and 777 as well as the A320 and A350.

With Covid-19 slowing commercial air travel to a trickle and the lingering Max grounding, Spirit reported a 45 percent decline in revenue and a $168 million loss during the first quarter compared with the same period last year. During the quarter, Spirit laid off more than 4,000 workers and instituted a number of other cost-cutting measures.