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On Monday, Boeing’s Union machinists voted to
accept the company’s contract offer an end to
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strike that stretched for more than seven weeks.
As the troubled plane maker gets back to
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business, the deal couldn’t have come at a more
crucial time for and it’s
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possible it didn’t come quickly enough for one
key partner.
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On Tuesday, Spirit, AEROSYSTEMS raised flags
when it said the company faced quote
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substantial doubt over its ability to continue
operating.
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The Boeing strike forced Spirit which makes
fuselages for Boeing’s 737 max aircraft to burn
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through cash reserves.
According to a recent earnings report,
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Spirit ended Q three with just $218 million
cash on hand.
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The company previously announced a $425 million
advance from Boeing,
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but that remains unpaid.
The company also secured a $350 million bridge
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loan and by the end of Q three, the entire
amount had been borrowed.
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Spirit is still looking for ways to improve
liquidity to support operations like additional
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customer advances, the ones that are paid
incremental debt financing and further
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restructuring.
The company has already implemented several
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cost cutting measures on October 18th, Spirit
announced employee furloughs a hiring freeze
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and travel and overtime restrictions.
All is a direct result of the Boeing strike
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beginning last Monday, October 28th, Spirit
implemented a 21 day furlough for some 700
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employees working on the 767 and 777 programs
due to the build up of a significant inventory
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buffer.
Spirit’s Q three revenue actually improved from
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the same time last year, but that was due to
higher production of other commercial programs
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and improved defense and space revenues.
Pat Shanahan,
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President and CEO of Spirit says the company is
still on track to close the Boeing acquisition
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by mid 2025.
And Spirit’s backlog stands at approximately 48
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billion with work on the books for both Airbus
and Boeing.
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Still Spirit gave no assurance that the
company’s plans will sufficiently improve
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liquidity so other cuts could be in the mix.
I’m David Manti.
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This is manufacturing now.