Auctioning off manufacturing program, cutting employment in new setback for aerostructures manufacturer
- Estimates loss at up to $235 million
- +500 workers on notice
- Evaluating remaining work
The Gulfstream G650 is a twin-engine business jet produced by Gulfstream Aerospace, with wings produced by Spirit AeroSystems in composite materials.
Wichita-based Spirit AeroSystems Inc. agreed to transfer its Gulfstream G650 and G280 wing programs to rival Triumph Group Inc., signaling a new round of downsizing for the group’s plant in Tulsa, Okla. A reported 501 workers there have been put on notice that the work will end in February. According to a company release, Spirit will make a payment of $160 million in cash to Triumph, representing a loss estimated at $205 million-$235 million.
Both Gulfstream jets are twin-engine business aircraft, the first built by Gulfstream Aerospace and the second by a licensee.
Spirit AeroSystems is a designer and manufacturer of aerostructures for commercial aircraft, including projects for the Boeing 737 and Airbus A320 programs, as well as Bombardier’s business jets. Its products include fuselages, pylons, nacelles, and wing components, andE3 AWACS radomes, engine cowls, and rudders for some military supply programs.
In mid 2013, Spirit started to revamp its organizational structure and workforce, cutting salaried positions and cutting production staff at plants in Tulsa and Wichita. Later, it exited a joint-venture manufacturing program in Russia with the Progresstech Group of Companies.
The problems for Spirit relate to cost overruns in several production programs, notably the Gulfstream business jet programs, for which it produces composite wing structures.
Triumph Group is a portfolio of more than 40 companies manufacturing and rebuilding aerostructures, aircraft components, and aerospace subassemblies systems.
"The Triumph Group emerged as the preferred owner of the Gulfstream wing programs following a rigorous bid process, and the deal offers compelling positives for both companies," stated Spirit AeroSystems president and CEO Larry Lawson. "We thoroughly evaluated all of our options and made the best decision for the company, our people and our customers.
Lawson said the work transfer “continues Spirit's transformation and allows us to further focus on our core markets of aerostructures for commercial and defense aircraft.”
The employees affected by the loss of business will be offered positions with Triumph, according to Spirit.
"As for the other Tulsa programs, we are taking a pause in the process to evaluate the remaining work," according to Lawson. "There are a number of factors to take into consideration, including exploring our options within the community and with other constituents who have approached us."