March 19, 2013

Spirit AeroSystems names Larry A. Lawson as its new president and CEO

Spirit AeroSystems has selected an executive with an extensive background in military aviation manufacturing as its next president and chief executive.

Spirit AeroSystems has selected an executive with an extensive background in military aviation manufacturing as its next president and chief executive.

Larry Lawson, a senior executive at defense contractor Lockheed Martin, was named Tuesday to succeed Jeff Turner, who has been Spirit’s CEO since it was founded in 2005.

Lawson, 55, will take over beginning April 6. He was not available for comment Tuesday.

Spirit, which employs 11,000 people in Wichita and 16,000 worldwide, manufactures large commercial aviation parts and components for Airbus, Boeing, Bombardier, Gulfstream and Mitsubishi. It has plants and operations in England; France; Scotland; Chanute, Tulsa and McAlester, Okla.; Kinston, N.C.; and Nashville, Tenn.

Richard Aboulafia, an aerospace analyst with the Teal Group, said that while Lawson is a “very respected executive,” the fact that he comes from a defense background makes his selection as the top executive of a commercial aerospace manufacturer “somewhat unexpected.”

“In terms of high-ranking commercial execs out there, there aren’t a lot to choose from,” Aboulafia said. “Going the defense route might have seemed the way to go in terms of a suitable caliber executive.”

He said the hire also could reflect the board’s desire to pursue more military work at Spirit or to take a different approach to running the company.

“The big challenge for Spirit is cost control and execution,” Aboulafia said. “Those are areas where Lockheed Martin wasn’t exactly distinguished.”

Turner was at the helm of Spirit when it recorded a $590 million write-off in the third quarter of 2012, which Turner blamed at the time on higher-than-expected costs from producing the Boeing 787 wing as well as other new aircraft programs. Eighteen days later, Spirit announced that Turner would retire in early 2013. He is expected to remain on Spirit’s board of directors.

“He himself is quite respected,” Aboulafia said of Lawson. “But still, there are questions.”

In a note to investors Tuesday, Cowen and Co. analysts noted that Lawson “brings extensive aircraft manufacturing experience and is well regarded for the manufacturing discipline he brought to the F-35 and for his ability as an effective negotiator.”

“Despite his lack of commercial experience, Lawson looks like a good choice for SPR’s (Spirit’s) CEO,” the note said.

Defense industry analyst Loren Thompson gave Lawson an even stronger endorsement. He said Lawson is “world-class” and one of the top six aerospace industry executives in the U.S.

“He’s an extremely dynamic and knowledgeable executive who understands every facet of supply, manufacturing and marketing,” said Thompson, chief operating officer of the Lexington Institute in Arlington, Va. “You could literally not do better than this guy.”

Bob Johnson, board chairman of Spirit AeroSystems, said of Lawson in a statement: “The board sought a CEO armed with a strong record of operating and financial performance on both mature and new aircraft programs with the ability to take Spirit to the next level. Larry met all of the board’s criteria.

“He is a well-known and highly respected leader in the industry and has outstanding experience managing multiple premier aircraft platforms efficiently and profitably across a large-scale business.”

Lawson’s career

Lawson began his career as a flight control engineer working on the F-15 Eagle at McDonnell Douglas. He has since held a range of leadership positions in engineering, advanced development, business development and program management.

In his work at Lockheed Martin, Lawson has overseen military aircraft production programs such as the F-35, F-22, F-16, C-130J and C-5, including highly classified programs in the renowned Skunk Works organization.

Lawson became executive vice president of Lockheed’s aeronautics segment last April. That segment, according to Lockheed news releases, reported $14.9 billion in revenue in 2012 compared with $14.4 billion in 2011.

On Monday, Lockheed announced Lawson’s retirement, effective April 5, after 26 years with the company.

Thompson said he thinks that, at one time, Lawson was on a path toward becoming Lockheed’s CEO.

“I think things changed,” he said, adding that he doesn’t think Lawson was the cause of the changes.

There were differences of management style between Lawson and the Lockheed management team, Thompson said.

“The possibility of him being the top executive receded because of changes that occurred over the last six months,” Thompson said.

According to a report Monday from Defense News, Lawson was the fourth high-profile executive to retire from Lockheed since new CEO Marilyn Hewson took over in January.

“This enables Lawson to become a president and CEO at relatively young age, and I think he will turn Spirit into a market leader,” Thompson said.

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