Spirit AeroSystems has entered arbitration with Gulfstream over a billing dispute on the wings of the G650 and G280 business jets, Spirit Aerosystems chief executive Larry Lawson says.
The dispute with Gulfstream arose over the last two years as Spirit AeroSystems has reported several forward losses worth more than $1 billion on the G650 and G280 wing programmes alone.
“We are in arbitration with Gulfstream,” says Lawson, speaking to analysts about third quarter financial results.
Gulfstream has been withholding full payment for wing components delivered by Spirit AeroSystems. Gulfstream has withheld the payments over incomplete work, but Spirit AeroSystems argues the incomplete work is a result of design changes by Gulfstream.
“Gulfstream is still taking withholds,” Lawson says, “and I believe they will continue to do that until we settle this arbitration.”
Gulfstream says it does not comment on disputes and litigation.
The arbitration case has begun while Spirit AeroSystems attempts to sell off the two factories in Oklahoma that are responsible for the G280 and G650 wings.
The programmes were expected to be a growth opportunity for Spirit AeroSystems, but have led to huge forward losses that resulted in the resignation of chief executive Jeff Turner earlier this year.
As Turner’s replacement, Lawson is steering Spirit AeroSystems’ growth strategy away from the business jet market. The company is now focused on growing as an aerostructures supplier for large commercial and military aircraft.