Issuu on Google+

The Spirit AeroSystems Magazine

The Spirit Aerosystems Magazine

MOVING FORWARD WITH

October 2012 | Volume 6 | Issue 1

Resilience

Why Spirit Is Your Choice


TABLE OF CONTENTS F E AT U R E A R T I C L E S :

04

MOMENTUM

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

07 08

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.”

11

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 momentum@spiritaero.com

Community SPIRIT

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

14

@spiritaero

spiritaero

ONLINE

CONNECT

spiritaerocorp orate


On Saturday, April 14, an

EF-3 tornado

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.

its customers.”

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,”

TORNADO

FACTS 4 | MOMENTUM

Number of hours before full power restored:

91

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

toward Spirit.

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

12 acres

Nearly of roof membraneof Number of support contractors at peak:

to cover leaky areas installed

1,190

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

19 (including

(enough to cover 17

a 275-ton crane!)

football fields one foot deep) 5 | MOMENTUM


Continued from page 5.

MOVING FORWARD WITH

Resilience

“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

planning helps.”

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

The goal

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

schedule.

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.

aerospace.

MOMENTUM | 7


About the

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.”

airline profitability.

AI

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

PINNER VISIT

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

high-altitude

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.

class configuration.

10 | MOMENTUM


SPIRIT

COMMUNITY

SPOTLIGHT ON KANSAS

Wichita volunteers

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

painted, cleaned

the athlete parade and opening

and organized the

ceremonies, and staged athletes

agency’s headquarters.

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 didn’t stop Spirit

Employees collected more than

Continue reading on page 12.

MOMENTUM | 11


Continued from page 11.

SPIRIT

COMMUNITY

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

and children.

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

during Christmas.

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

Mini Olympics.

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

suppliers and

they will be distributed to local school

employees

children in need. The “Build a Back Pack”

attended the

program is the largest school supply

event.

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

Prestwick Cycle

selected a new charity for the next two

Challenge

fundraising years, Action for Children,

and Spirit UK

an organization that helps make a

sponsored the

the annual

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

extraordinary

contract amendment.

effort and teamwork after

Operating income was $83 million,

the severe

compared to $64 million for the same

weather event

period in 2011, driven by increased

on April 14,

production volume. In the quarter, as

minimizing

previously announced, the company

the impact to

recognized a pre-tax ($55) million, or

our customers,”

($0.26) per share, charge for expenses

Turner

related to the April 14 severe weather

continued.

event at its Wichita, KS facility. The company also recognized a pre-tax ($7)

“Overall,

million, or ($0.03) per share, additional

this quarter

forward-loss on the A350 non-recurring

exemplifies

wing program. In comparison, the

how Spirit

second quarter of 2011 operating

AeroSystems is

income included a pre-tax ($53)

well positioned

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

of 2011.

million source of cash for the second

the quarter and remained unchanged

14 | MOMENTUM


2Q

Revenues

$83

million

$1.341 billion

Operating Income

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.

Operating Margins

6.2% (including previously announced charges) Fully Diluted Earnings Per Share

$0.24

(including previously announced charges of $0.31 per share) Cash & Cash Equivalents

$32

million

$180

million

Approximate Total backlog

Full-Year 2012 Financial Guidance remains

unchanged

(excluding severe weather impacts)

by Moody’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



Spirit AeroSystems - October 2012