The Spirit AeroSystems Magazine
The Spirit Aerosystems Magazine
MOVING FORWARD WITH
October 2012 | Volume 6 | Issue 1
Why Spirit Is Your Choice
TABLE OF CONTENTS F E AT U R E A R T I C L E S :
THE SPIRIT AEROSYSTEMS MAGAZINE
Moving forward with RESILIENCE On Saturday, April 14, an EF-3 tornado slammed into Spirit Wichita. After employees working that night were accounted for, the next order of business was to start delivering airplanes again as quickly as possible.
Engineering Design Center in NASHVILLE
2Q Earnings 2012
CONTRIBUTORS: Jarrod Bartlett Jeff Black Mike Jackson Sharon Pullen Lin Ramsay Sam Sackett Spirit Creative Services
Momentum is published periodically for external readers as well as Spirit AeroSystems employees worldwide.
AIRBUS 101 “Airbus is a critical customer for Spirit, and as we continue to grow our relationship with Airbus, we hope to grow our work statement as well.”
EDITOR: Lisa Conklin
The copyright for photographs and illustrations in Momentum is not always owned by Spirit AeroSystems. Please contact Spirit AeroSystems for more information. CONTACT: Momentum P.O. Box 780008 MC K12-14 Wichita, KS 67278-0008 firstname.lastname@example.org
To subscribe to the electronic version of Momentum, visit www.spiritaero.com/momentum.aspx
In Wichita, employees collected more than $60,000 in monetary donations, and nearly $20,000 in school supplies to total an $80,000 donation to help local school children in need.
© Spirit AeroSystems, 2012
On Saturday, April 14, an
immediately. Any delay in delivering
said Stewart Johnson, Boeing director
to our customers could literally leave
for 737 quality. “The entire team rallied
passengers without a plane to ride in.”
to bring back operations in an effort to minimize any disruption to Boeing and
slammed into Spirit Wichita.
Orders completed before the storm
After employees working that night
tornado hit. Some Aftermarket items
were accounted for, the next order
shipped four days after the storm, and
of business was to start delivering
on day six, railcars were moving again
airplanes again as quickly as possible.
with 737 fuselages.
began shipping just five days after the
How did Spirit return to operations so quickly? In large part, it was because of
An initial assessment of the facility
partnerships with contractors like Eby
found that Spirit’s operational
“The fuselages shipped just three days
Construction. A team from Eby met with
capabilities were still intact. Once safety
late to the master schedule,” said Jim
Spirit’s senior operations leadership
and security measures were in place,
Hans, director of 737 final assembly.
three times a day to help prioritize
Spirit employees could begin filling the
“They were scheduled to ship Tuesday,
recovery efforts, starting with restoring
air with the sounds of drilling and rivets.
and they ended up shipping Friday. We
gas, water and power.
did not miss any scheduled loads of our “Our customers deliver airplanes
products to Boeing.” Boeing executives
“Quite simply, it was amazing teamwork,”
every day,” said John Pilla, senior vice
have congratulated Spirit for returning
said David Coleal, senior vice president,
president/general manager, Propulsion
to operations so quickly.
fuselage segment. “It was the power of
& Wing Segments; Aftermarket. “Airlines have those aircraft planned into routes
people coming together so quickly to “I was amazed at the swift recovery,”
FACTS 4 | MOMENTUM
Number of hours before full power restored:
accomplish so much.”
Sq. ft. roof damage:
10 million ~32 acres
Sq. ft. roof repaired of new or repaired so far: roof installed
MOVING FORWARD WITH
Resilience Emergency plans pay off for Security and EHS
confirming that all employees had
was preparing to drive into work to
made it safely out of shelters and that
assess the damage.
At his home, Dan Marceau, senior
could get to work inspecting buildings.
there were no injuries. Then, teams “Not knowing what I was going to see as I drove north along Oliver Street,
manager of security, was on the edge of his seat the night of April 14. When he
Spirit is not required by law to do
the first thing I noticed was the IPB
heard the tornado was heading toward
weather drills in which all employees
buildings,” said Redford. “It was dark,
Southeast Wichita, he started driving
must physically go to shelter, but it is a
but I could see the front of the buildings
Spirit safety policy.
were down. I was amazed at how much damage I could
Driving to the facility, Marceau was struck by the eerie darkness – the Spirit campus was pitch black. Debris lay everywhere across the roads and parking lots. When Marceau arrived, he was surprised – and
Facilities teams focus on full recovery for site infrastructure
see when I turned west and began driving over rubble. All of a sudden, we got into full response mode according to the procedures we have established.”
grateful – to see Spirit uniformed security
Ron Redford, senior manager for
officers already on site, before they were
global facilities, was watching
even called to the scene.
weather reports from his home
When Redford looks back at those
Without the benefit of landline phones,
April 14 to see if the Wichita
first 24 hours, he said it seems like a
radios or computers, Security Manager
region would be hit with a tornado
blur. Him and his team proceeded by
Jason Neal and a team of officers started
that night. As news came that Spirit’s
foot to the security building as a central
the process of clearing buildings,
Wichita facility had taken a hit, Redford
meeting point for their teams. Redford
Nearly of roof membraneof Number of support contractors at peak:
to cover leaky areas installed
Continue reading on page 6.
Maximum number of cranes on site at once:
Loads of debris: 300 fortycubic-yard dumpsters and 350 semi-truck-loads of trash
(enough to cover 17
a 275-ton crane!)
football fields one foot deep) 5 | MOMENTUM
Continued from page 5.
MOVING FORWARD WITH
“When Jeff put up that April 23 target
described avoiding downed power
everyone else to sign it, he set that vision
lines, and that’s when they passed employees coming out of shelters. “The number one thing we were all concerned with was everyone’s safety,” said Redford. “We kept asking, ‘Is everyone OK?’ We were so thankful there were no injuries. Once we established that, we continued making calls and organizing our teams.” Redford said disaster planning helped Spirit teams quickly take action during the first 24 hours. The Wichita facilities team maintains a red disaster preparedness book that contains key contact information, forms and processes. The book had been updated April 2, less than two weeks
on the wall and signed it and asked for us,” said Redford. “This is an awesome team and an awesome company. It was a whole bunch of individual teams coming together as one whole team to accomplish the goal. It’s really amazing. I couldn’t be more proud of what this team has accomplished.”
Spirit Tulsa comes through for Aftermarket The mission of Southwest Airlines is to provide great value and excellent service. To fulfill that mission, they require speedy maintenance and repair on their fleet. A week before the tornado, Southwest sent two 737 thrust reversers to the Spirit
before the tornado.
Wichita site for maintenance work by the
“You don’t always have time to go
customer’s April 27 deadline was critical.
through a process flow and read about the next step,” said Redford. “You have to know it. Having considered what could happen before, having gone through this planning, and having helped put the book together, we
Aftermarket Services team. Meeting the The tornado might have thrown a wrench into those plans, if not for Spirit Tulsa. Following the tornado, Aftermarket
Labor partnerships and flexibility key to recovery When he was director of facilities, Adam Pogue spent a lot of time thinking about what to do if a disaster hit Wichita. He recalled that mental checklist when the tornado struck. As vice president of employee, labor relations and rewards, Pogue knew that one of the critical first steps toward recovery was to work with Spirit’s labor partners. “When we set the course and said by May 31 we would be back to full production, there was a feeling of awe. Then, we had to get into action.” Pogue said years of building labor partnerships and developing longterm agreements have fostered an environment of flexibility that was central to the tornado recovery. “The unions were coming forward offering up different thoughts and ideas and creative ways of thinking about what their teams’ skill sets, levels of expertise and backgrounds could bring
contacted Tulsa to ask for their help
to this recovery,” said Pogue. “It really was
curing inner wall repairs for the units.
an amazing thing.”
Inner wall composite parts from the Wichita MRO facility were transported
“Labor leaders brought ideas about
and received in Tulsa. They were cured in
what they could do to help, and that
an autoclave, loaded back on a truck, and
contributed significantly to our ability to
sent back to Wichita in just 10 hours.
get back to production so quickly,” said
Redford said one of the turning points
As a result of the teamwork cross both
in the recovery effort was when Jeff
sites, the units were delivered to the
Turner, Spirit president and CEO, on
customer April 26 – one day ahead of
Tuesday asked everyone to achieve full
knew what needed to be done. Good
production by April 23.
6 | MOMENTUM
Pogue. “I couldn’t have asked for better cooperation.”
SPIRIT ADDS ENGINEERING DESIGN CENTER IN
NASHVILLE Spirit recently opened an engineering design center in Nashville, Tenn. The Nashville Design Center will support new program development reporting to Spirit’s vice president of Engineering Andy Cobb. Dan Jacob is the director for the facility and reports directly to Cobb. “Employees here are very pleased to be a part of the Spirit team,” said Jacob. “The
Nashville team will complement the skills
“I’m confident our new teammates will
and expertise that already exists at Spirit.”
complement our current engineering processes and even enhance them with
The Nashville team joined Spirit after the
new and better ideas,” said Cobb.
company initiated a search for a qualified team of engineers. The team was selected
There are currently 26 employees at the
based on their experience and expertise.
Nashville facility with the potential to grow
The group previously worked for GKN
as new projects are identified.
MOMENTUM | 7
A350 XWB The A350 XWB is an all new family
of mid-sized, wide-body airliners to shape the efficiency of mediumto-long haul airline operations.
Airbus, one of Spirit AeroSystems’ prime
Airbus president and CEO at the
customers, is growing its presence
announcement in Mobile. “The U.S. is
in the United States. Recently the
the largest single-aisle aircraft market
company announced it will build a new
in the world – with a projected need for
manufacturing plant in Mobile, Ala.,
4,600 aircraft over the next 20 years —
where it will assemble the A319, A320
and this assembly line brings us closer
and A321 aircraft. This is Airbus’ first
to our customers.”
production facility in the United States. The United States is the largest single
The A350 XWB Family consists of
EXPANSION IN AMERICA
supplier country to Airbus, and the
three passenger versions with long-
“The time is right for Airbus to expand
range capability of flying up to
in America,” said Fabrice Brégier,
with suppliers in more than 40 states,
8,500nm/15,580km. In a typical three-
airplane manufacturer supports jobs including Kansas.
class configuration, the A350-800 will offer 270 seats while the A350-900 and the A350-1000 will offer 314 and 350 seats, respectively. With one aircraft available in three different sizes, airlines can match their A350 XWB fleets to route capacity demands, guaranteeing optimum revenue potential. Pilots can fly all three versions with the same certification, which further maximizes
“Airbus is a critical customer for Spirit, and as we continue to grow our relationship with
Airbus, we hope
to grow our work statement as well.”
Over 70 percent of the A350 XWB’s weight-efficient airframe is made from advanced materials combining composites (53 percent), titanium and advanced aluminum alloys. The aircraft’s all-new Carbon Fibre Reinforced Plastic fuselage results in lower fuel burn as well as easier maintenance.
SPIRIT’S WORK STATEMENT Spirit’s largest Airbus work statement is on the A350 XWB – Section 15 – or the center fuselage section. The fuselage section as well as wing spars are both produced at Spirit’s Kinston, N.C., facility. A number of Spirit engineers work on Section 15 in Wichita, while the majority of employees in Kinston manufacture the composite panels and wing spar pieces. From there, the components are shipped across the
Atlantic ocean to Spirit’s assembly facility in Saint-Nazaire, France. Once assembled, the Section 15 barrel is delivered to Airbus’ Saint-Nazaire facility nearby for integration. In addition to A350 XWB work, Spirit also has wing assembly work at its European facilities. The company’s Prestwick, Scotland, operation produces structural components, chiefly on wings, across the entire Airbus range. Airbus wing work Continue reading on page 10.
8 | MOMENTUM
IRBUS 101 MOMENTUM | 9
Continued from page 8.
AIRBUS 101 includes structures on the A320, A330,
contributions on the A350 program.
A340, A380 and A350 families of aircraft.
Pinner stressed the importance of relationships and said the entire
CRITICAL CUSTOMER “Airbus is a critical customer for Spirit, and as we continue to grow our relationship with Airbus, we hope to grow our work statement as well,” said Dan Wheeler, then-vice president and general manager of the Spirit North Carolina business unit.
team is what makes the program successful.
SUPPLIER SUMMIT Then in August, David Walker, Spirit senior vice president/chief technology officer, business development & A350, spoke at the Airbus Air Capital Supplier Summit held in Wichita. Walker spoke about
the importance of a strong and
Back in Wichita, in late June, Spirit
diverse supply base and noted that
executives hosted Geoff Pinner,
Spirit does significant business with
head of A350 XWB fuselage and
hundreds of suppliers in Kansas.
cabin engineering, and John O’Leary,
Spirit has about 40 Kansas suppliers
vice president of engineering for
supporting the Airbus A350 alone
Airbus Americas, for a meeting
with annual receipts of about $5
with Spirit Wichita A350 engineers.
million. U.S. Sen. Jerry Moran and
O’Leary described Airbus as an
Airbus Americas Chairman Allan
Training. Approximately 114 companies
“entrepreneurial” company and
McArtor hosted the summit at
attended, and Spirit was an official
thanked Spirit employees for their
the National Center for Aviation
sponsor of the summit.
AirbusFACTS: The A320 single-aisle jetliner family (the
The A330 Family has five members –
A318, A319, A320 and A321) is used in
the A330-200, A330-300, A330-200F,
a full range of services from very short-
ACJ330 and A330 MRTT – which cover
haul airline routes to intercontinental
all market segments with one twin-
segments, on operations
engine aircraft type.
A350 XWB, Over 70% of the A350 XWB’s weight-efficient airframe is made from advanced materials, combining 53% of composite structures with titanium and advanced aluminum alloys.
A380 family, The double-deck
from challenging incity airports to
A340 family, Four versions of the A340
A380 is the
were produced by Airbus: the A340-
world’s largest commercial aircraft
airfields and an Antarctic ice runway, and
200, A340-300, A340-500 and A340-
flying today, with capacity to carry 525
on VIP and government missions with
600. The program is now completed,
passengers in a comfortable three-class
the most discerning passengers.
but Airbus will support the fleet as
configuration, and up to 853 in a single-
long as it is in operation.
10 | MOMENTUM
SPOTLIGHT ON KANSAS
In June, Spirit employees and their
agency Victory in
families volunteered at Special
the Valley. More
Olympics of Kansas. Individuals helped
than 20 volunteers
decorate the stadium, assisted with
the athlete parade and opening
and organized the
ceremonies, and staged athletes
from helping at local
before their track events. More than 200 individuals volunteered with Spirit
Also in July, Spirit Wichita
in this effort to help special athletes.
employees held the annual Tools for School fundraising
July brought a lot of hot weather to
event for the Salvation Army.
Kansas, but that didnâ€™t stop Spirit
Employees collected more than
Continue reading on page 12.
MOMENTUM | 11
Continued from page 11.
cannot afford medical attention, including test strips for diabetic patients. Contributions made to Hope House
$60,000 in monetary donations, and
make it possible for them to provide
nearly $20,000 in school supplies to
homeless shelter services for women
total an $80,000 donation to help local
school children in need. Funds donated to the Choose to Give
SPOTLIGHT ON OKLAHOMA
organization are used to provide clothing and toys for children who otherwise may not receive gifts
Employees from the McAlester Good
Neighbor Fund recently provided grants to a number of local agencies.
In August, 38 volunteers from Spirit
Donations made to Mercy Health Clinic
Tulsa volunteered at the local Food
will help provide medical services
Bank. The team sorted and weighed
to members of the community who
numerous pallets of assorted food items.
12 | MOMENTUM
SPOTLIGHT ON NORTH CAROLINA
difference in the lives of the most
local primary school’s Monkton
vulnerable and neglected children in
local areas. Since Team Spirit was launched in
In Kinston, employees had great success in collecting monetary
In August, Spirit Europe hosted a
2007, a total of £130,000 has been
donations and school supplies for the
Charity Golf Tournament which raised
raised for selected charities.
“Build a Back Pack” campaign in Lenoir
£7,448 for the newly-named charity.
County. Donations were taken to the
A number of
Lenoir County United Way, where
they will be distributed to local school
children in need. The “Build a Back Pack”
program is the largest school supply
drive ever conducted by Wal-Mart in Lenoir County.
Also in recent months, employees
SPOTLIGHT ON EUROPE
took part in
In May, Spirit Europe employees
selected a new charity for the next two
fundraising years, Action for Children,
and Spirit UK
an organization that helps make a
MOMENTUM | 13
Q2 EARNINGS Spirit AeroSystems Holdings, Inc.
“During the quarter, our large
quarter of 2012, compared to a $114
reported second quarter 2012
commercial aircraft deliveries
million use of cash for the second
financial results reflecting solid core
increased by 12 percent over the
quarter of 2011.
operating performance, continued
second quarter of 2011, reflecting the
strong demand for large commercial
strong ongoing demand for aircraft
Cash balances at the end of the
aircraft, and the impact of unusual
worldwide,” said President and Chief
quarter were $180 million and debt
charges. Spirit’s second quarter 2012
Executive Officer Jeff Turner.
balances were $1,178 million. The
revenues were $1.341 billion, down
company utilized its credit line during
from $1.466 billion for the same period
“We were also pleased that the Spirit
the quarter as it continued to invest
of 2011 as the previous period included
team and our partners successfully
in development programs, and fully
recognition of deferred revenue
restored production through
repaid the borrowing by the end of
associated with the 787 program
effort and teamwork after
Operating income was $83 million,
compared to $64 million for the same
period in 2011, driven by increased
on April 14,
production volume. In the quarter, as
previously announced, the company
the impact to
recognized a pre-tax ($55) million, or
($0.26) per share, charge for expenses
related to the April 14 severe weather
event at its Wichita, KS facility. The company also recognized a pre-tax ($7)
million, or ($0.03) per share, additional
forward-loss on the A350 non-recurring
wing program. In comparison, the
second quarter of 2011 operating
income included a pre-tax ($53)
million additional forward-loss on the
to meet the demand for large aircraft
the quarter. Approximately $19.9
Gulfstream G280 wing program.
as we are focused on continued
million of the credit facility is reserved
reliability, capability, and teamwork to
for financial letters of credit.
Net income for the quarter was $35
align the business for long-term value
million, or $0.24 per fully diluted share,
creation,” Turner concluded.
compared to $30 million, or $0.21 per
The company’s credit rating was affirmed (BB) and placed on positive
fully diluted share, in the same period
Cash flow from operations was a $121
outlook by Standard & Poor’s during
million source of cash for the second
the quarter and remained unchanged
14 | MOMENTUM
STOCK WATCH The charts below show the stock price of Spirit compared to the S&P 500 index, the S&P Aerospace and Defense index, and other aerospace companies. Prices/values are plotted as an index number. The base date for the price/values is Nov. 21, 2006, the date Spirit become a public entity. Each data point represents the end of a trade day.
6.2% (including previously announced charges) Fully Diluted Earnings Per Share
(including previously announced charges of $0.31 per share) Cash & Cash Equivalents
Approximate Total backlog
Full-Year 2012 Financial Guidance remains
(excluding severe weather impacts)
by Moodyâ€™s Investor Services (Ba2, positive outlook) at the end of the quarter. To view the entire Q2 financial release, visit www.spiritaero.com.
MOMENTUM | 15
Headquarters 3801 S. Oliver St. Wichita, KS 67210 Phone: (316) 526-9000 Toll Free: (800) 501-7597 www.spiritaero.com