Despite losing $239 million during the second quarter of 2013, Spirit AeroSystems is not rushing to divest two plants in Oklahoma that the company says may be responsible for $1 billion in forward operating losses.
"We are committed to the sites on an ongoing operation," says Spirit's chief executive Larry Lawson during the company's second quarter earnings call on 12 August. "It's not a fire sale."
His comments follow the 6 August announcement that the Wichita, Kansas-based aerostructures supplier had begun the process of divesting plants in Tulsa and McAlester, where it has wing and subassembly manufacturing sites.
The company's second quarter $239 million operating loss is a stark reversal compared to the second quarter of 2012, when Spirit reported an operating profit of $83 million.
Spirit reports revenue of $1.5 billion during the quarter, up 13% year-over-year.
The red ink comes from the company's wing systems division, which posted a $404 million operating loss during the period.
Meanwhile, Spirit's fuselage systems division posted a $150 million profit and its propulsion systems division posted a $81.6 million profit.
The losses come from roughly $448 million in pre-tax charges which Spirit attributes to higher forecasted supply chain and labour costs on its business jet programmes between 2014 and 2019.
The charges include $234 million from Spirit's Gulfstream G650 wing programme and $191 million from the Gulfstream G280 wing programme.
In addition, Spirit reports charges of $22 million related to Boeing 787 wing work and $9 million related to Boeing 767 and 747-800 work.
The company reports a backlog of $38 billion, which it says represents growing demand worldwide for its products.
It predicts single-aisle aircraft will remain the major driver of the commercial aerospace market growth over the next 20 years.
"Spirit is well positioned with approximately 65% of backlog on the next generation 737 MAX and A320neo programs," says Lawson in a statement. "Longer-term, we believe there are growth opportunities in large commercial aircraft as well as potentially in the defense market."
Lawson says new owners of the Oklahoma sites might be able to find more manufacturing efficiencies and new markets for its products.
"We made progress on the strategic and financial review during the second quarter of 2013, and have already taken several actions, including the previously announced initiation of the process to divest our Oklahoma sites," he says in the statement. "This is the result of a strategic decision to target our resources more towards value-added engineering and manufacturing where we have the strongest
competitive advantage and potential for growth."