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Spirit Aerosystems to sell Tulsa, McAlester facilities
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Spirit Aerosystems to sell Tulsa, McAlester facilities

Spirit Aerosystems to sell Tulsa, McAlester facilities
Photo Credit: Russell Mills

Spirit Aerosystems to sell Tulsa, McAlester facilities

Spirit Aerosystems has announced it will sell its facilities in Tulsa and McAlester.

The news came in an email from President and CEO Larry Lawson, obtained by KRMG news early Tuesday (see below).

Approximately 3,000 employees in the Tulsa facility could be affected by a potential sale.

Mike Neal, president and CEO of the Tulsa Regional Chamber, issued the following statement:

“Spirit AeroSystems has been a valued employer in the Tulsa region for more than 8 years. While the company has announced it will explore plans to sell its Oklahoma operations, there are many variables at play and it is too early to speculate what will be the final outcome.

“In the event the company sells its Tulsa operations, the Chamber, City of Tulsa and other workforce and economic development partners across the region will remain engaged in encouraging buyers to continue investment in the Tulsa operations and our highly-skilled aerospace and manufacturing workforce currently working at the plant. Many of these same experienced workers have long been a part of our community, working at the plant years before Spirit’s arrival under companies like Boeing and prior to that, Rockwell and McDonnell Douglas.

“We are encouraged to hear Spirit’s CEO Larry Lawson publicly acknowledge today the Tulsa plant is performing very well and improving. We realize companies across the world routinely explore possible divestitures for a multitude of reasons, and we will remain hopeful this process will result in a positive outcome for the Tulsa region."

Recently, British aerospace and car parts maker GKN expressed interest in buying the factory.

It's unclear if that announcement had anything to do with Spirit's decision to divest itself of its Oklahoma properties.

Here's the text of the email obtained by KRMG:

As you know, we are in the midst of a comprehensive review of our business and as we make strategic decisions, will share them along the way. Spirit is announcing today that it has begun a process to divest its Oklahoma sites. This decision is about where Spirit can best differentiate itself in the aerostructures marketplace and about future allocation of our resources. I can assure you that we didn’t come to this divestiture decision lightly; it was made after careful evaluation, and we are confident in the value of these sites. They include good people and solid programs with products in high demand. We believe these programs may better align with another company’s strategy and core competencies. We’re very proud of what we are accomplishing in Oklahoma, and we’re not going to let up in our intensity. However, it’s worth exploring whether there’s a better owner who is interested in growing within this market space. A different owner may have synergies in the supply chain, fabrication, or similar contract leverage.

 Additionally, the company announced today that we expect to record between a $350 million to $400 million pre-tax charge related primarily to the Gulfstream business jet programs. This charge and the decision to divest are separate issues. The charge is related primarily to forecasted cost growth in the Wing Segment in the years 2014-2021 with minimal cash flow impact in the current period.

 Related to the second quarter financial statements, the company’s auditors have not completed their review. The company will postpone the second quarter earnings release and make appropriate arrangements to reschedule a full earnings report once the review is complete. 

 The charges are one indication that our cost structure continues driving expenses that are too high. While these results don’t tell our full story, they are the hard data by which we are measured, and clearly we have to demand more of ourselves. Changes are never easy, but Spirit must make dramatic improvements in order to keep our company healthy in a competitive environment. We have to do what any good competitor does. When we get knocked down – we get back up, shake it off, and bring our “A-game” to get back on the winning track.

 We’re intensifying the focus around four key things: Disciplined decision making and market focus, Performance, Cost, and Cash Flow. And the good news is, although we have challenges, we also have some great fundamentals to work with. Spirit has a strong team, we are on the right programs, with a $38 billion backlog, we bring differentiating capability to the marketplace, and we are focused on strong program performance and cash generation. 

 Thank you for your hard work and strategic focus as we move toward becoming the world’s pre-eminent, low-cost commercial aerospace and defense supplier.

 

Sincerely,

 Larry Lawson

President & CEO

Spirit AeroSystems

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