June 3, 2012

Spirit AeroSystems: Tornado did not affect customers

Six weeks after an EF-3 tornado hit Spirit AeroSystems Wichita facilities, the site is close to being back on its normal shipping schedule.

Six weeks after an EF-3 tornado hit Spirit AeroSystems Wichita facilities, the site is close to being back on its normal shipping schedule.

That’s a feat that first seemed impossible to achieve shortly after the April 14 tornado caused major damage to the facilities.

The tornado ripped roofs from buildings and left debris sprawled throughout the complex.

And although production was disrupted for seven days, the best news is that Spirit customers saw no impact, said David Coleal, Spirit senior vice president and general manager of the company’s fuselage segment.

“They never saw any disruption to their factory,” Coleal said, saying Spirit met all its “load dates.”

That means product from Spirit went to customers’ production lines on the dates they were supposed to, he said.

“We have done a fantastic job of keeping the pain in Wichita and not affecting any of our customers,” Coleal said.

Boeing is the company’s most prominent customer.

Spirit projects the return of a full normal schedule by the end of the second quarter.

Work on Boeing’s popular 737 is close to being back on a master schedule, Coleal said. The 787 is back on schedule, while work on the twin aisle commercial airliners, the 747, 767 and 777, is running a bit slower.

The company’s ability to come back so quickly and meet customers’ needs, he said, is a credit to the team in Wichita.

“We couldn’t be more pleased with the team – their responsiveness and their teamwork,” Coleal said.

The biggest challenge immediately following the storm was understanding what all had to be done to get 11,000 people back to work, Coleal said.

“There wasn’t just one thing that had to happen,” he said.

Power had to be restored, holes in roofs covered, equipment checked and fixed and debris cleared.

“It was like peeling back an onion,” Coleal said.

And no one could really know how quickly production lines could be restored.

“Could we get every … production process up and running to a level of capacity to meet normal production in five days?” Coleal said. “You really didn’t know.”

Spirit is mostly caught up from the tornado, notes Cowen Co. analyst Cai von Rumohr in an analyst report.

Boeing 737 thrust reversers built by Spirit are expected to be back at normal production rates by early in the third quarter, von Rumohr said, without disruption to Boeing’s output.

In addition, Spirit has reached agreement with its insurers on cleanup and property damage costs and has advances in hand, von Rumohr wrote.

The company also has business interruption insurance, but a settlement may take several months.

Work inside the plant is fast paced The shop floor is punctuated by the sounds of rivet guns.

Besides recovering from the damage, Spirit is also increasing the number of Boeing 737 fuselages it builds from 35 a month to 38, and up to 42.

Signs around the factory mark last Thursday as a milestone day.

“EF3 to FOB (freight on board) by May 31” the signs read, marking the aircraft structures shipped to customers following the blow from the tornado.

Moving forward

The company still must make permanent fixes and repairs in addition to the temporary ones made following after the tornado.

Those will be made over the next few months, officials said, and two buildings may still have to be torn down.

Decisions must be made on whether to rebuild back to the original condition “or do some other things,” Coleal said.

“We have to figure it out,” he said.

On the shop floor, there is still disruption in the production flow.

Workers are being flexible, said Spirit spokesman Ken Evans.

They have been working a significant amount of overtime in fuselage and propulsion areas in Wichita, company officials said, although the amount of overtime is starting to ease.

The biggest challenge now is about “making sure that this (the tornado) doesn’t affect the cost,” Coleal said, saying the company is striving to get back to normal levels of overtime and back to pre-tornado operating conditions.

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