Spirit AeroSystems, an aerospace supplier, has announced that it will be laying off some of its workers due to slower delivery rates on commercial aircraft. The company is facing challenges as its biggest commercial airplane customer, Boeing, is experiencing a slowdown. In a memo to staff, Spirit AeroSystems stated that it would be cutting around 400 to 450 hourly employees. The company emphasized its commitment to carrying out this transition in a compassionate manner.
At the end of 2023, approximately 12,600 people were employed at Spirit AeroSystems’ Wichita facility. The company’s annual filing revealed this information. Spirit AeroSystems is responsible for manufacturing fuselages for Boeing’s popular 737 Max plane at this plant. However, deliveries of the aircraft have been impacted by a door panel blowout and subsequent safety crisis at Boeing. As a result, first-quarter Boeing deliveries decreased by 31% compared to the same period in 2023, and overall deliveries were down by 11.3%. This decline in business has led to the company reporting a quarterly loss of $616.7 million for the first three months of the year.
It is worth noting that Spirit AeroSystems has faced financial struggles in recent years and was last profitable in 2019. However, there may be hope on the horizon for the company as it is currently in talks to be acquired by Boeing. Spirit AeroSystems was spun off from Boeing in 2005, but about 70% of its revenue last year still came from the aircraft manufacturer. It is important to mention that Spirit AeroSystems also manufactures parts for Boeing’s rival, Airbus.
In an interview with CNBC in April 2024, Boeing CEO Dave Calhoun expressed optimism about the acquisition, stating that it is “more than likely” that a deal will be reached during the second quarter. This potential acquisition could provide some stability and opportunities for growth for Spirit AeroSystems.
While Spirit AeroSystems navigates these challenges, investors may be interested in exploring other investment opportunities. CNBC Pro has analyzed Goldman Sachs’ May conviction lists and identified stocks that have the potential for further upside of 50% or more, based on the bank’s price targets. This could be a valuable resource for those looking to diversify their portfolios and make informed investment decisions.
In conclusion, Spirit AeroSystems is facing layoffs due to slower delivery rates on commercial aircraft caused by a slowdown at its biggest customer, Boeing. The company has committed to carrying out this transition in a compassionate manner. However, there may be potential for growth as it is currently in talks to be acquired by Boeing. Investors looking for new opportunities can explore CNBC Pro’s analysis of Goldman Sachs’ conviction lists for potential high-growth stocks.
