Troubled aerostructures manufacturer Spirit AeroSystems has a purchase agreement to sell its Fiber Materials Inc. subsidiary to Tex-Tech Industries for $165 million. This is the latest step by Spirit to accrue cash, to continue operating as it prepares to be acquired by Boeing, a deal on track to close in 2025.
In its recent 3Q earnings statement Spirit warned that its cash reserves are shrinking, and its survivability is in jeopardy.
The company is a primary supplier to Boeing, Airbus, and other aircraft builders, but it has been severely impacted by ongoing quality and supply issues.
The essential nature of Spirit to Boeing’s commercial aircraft programs prompted the latter to structure a $4-billion takeover of its supplier.
The new capital will add to the $350 million that Spirit is due to receive from Boeing in an arrangement announced this month, which follows an estimated $565 million in capital that Boeing has extended to Spirit AeroSystems over the past year to keep its own manufacturing program on track.
Spirit also negotiated a $107-million line of credit with Airbus.
Spirit Aero manufactures fuselage assemblies for the Boeing 737 MAX and 787 Dreamliner programs, and it has been the object of much scrutiny over recent years owing to a series of structural and maintenance issues on those aircraft. Spirit’s difficulty maintaining a reliable supply of 737 MAX structures was one reason that the supplier and its customer adopted a “traveled work” approach, in which semi-finished fuselage sections were delivered to Boeing and finished as other assembly work proceeded. This has been identified as one cause of structural defects and inconsistencies in the aircraft.
This fall’s now-concluded strike by the International Assn. of Machinists union at Boeing’s 737 MAX and 777 assembly operations further disrupted the supply arrangement and destabilized Spirit’s financial condition.
Fiber Materials Inc. is a specialty producer of multidirectional reinforced carbon/carbon (C/C) and ceramic matrix composites (CMCs) that Spirit purchased in February 2020 from Edgewater Capital Partners, a private equity group. FMI produces high-temperature materials and composites, primarily as a supplier to defense and space manufacturers, and is noted for its 3D-woven carbon-carbon high-temperature materials for hypersonic missiles.
FMI has two operations, one in Biddeford, Maine, that produces C/Cs and CMCs for high-temperature components used in thermal protection systems, re-entry vehicle nose tips, and rocket motor throats and nozzles. A second plant in Woonsocket, R.I., is active in textile engineering and manufacturing of 2D woven fabrics, 3D woven preforms, and fiber reinforced composite.
Tex-Tech manufactures specialty textiles and fabrics for OEMs in multiple industries, plus niche applications.
"Tex-Tech is excited to add FMI's unique array of high-performance products to our existing portfolio of offerings for the rapidly growing space and defense industry," stated CEO Scott Burkhart. "Our customers demand world-class solutions, and the integration of FMI bolsters our ability to meet those demands."
