The Spirit AeroSystems Magazine SPIRIT MALAYSIA Issue Two

Transcription

1 The Spirit AeroSystems Magazine SPIRIT MALAYSIA 2009 Issue Two

2 I N T H I S I S S U E: FEATURE ARTICLES 11 GLOBAL DESIGN CHALLENGE COMMUNITY SPIRIT 1ST QUARTER 2009 FINANCIALS STOCK WATCH MOMENTUM

3 20 09 VOLUME THREE NUMBER TWO 4 SPIRIT MALAYSIA MOMENTUM THE SPIRIT AEROSYSTEMS MAGAZINE 2009 ISSUE TWO EDITOR: Lisa Conklin CONTRIBUTORS: Brian Black Stacey Brown Joseph Onijala Conrad King Bob Smith Mark Walker Spirit Creative Services Momentum is published quarterly for external readers as well as Spirit AeroSystems employees worldwide. P-8A FIRST FLIGHT The copyright for photographs and illustrations in Momentum is not always owned by Spirit AeroSystems. Please contact Spirit AeroSystems for more information. 8 TULSA S BIG PROJECT CONTACT: Momentum P.O. Box MC K12-14 Wichita, KS momentum@spiritaero.com To subscribe to the electronic version of Momentum, visit Spirit AeroSystems, ,000TH 737 spiritaero.com 3

4 GLOBAL FOOTPRINT EXPANDS The Spirit Europe Malaysian facility, located in Subang, officially opened in FROM PRESTWICK TO MALAYSIA Collective efforts from a team composed of Spirit employees from both the UK and Malaysia ensured smooth operations for Spirit Malaysia s first pieces of work. Temporarily located in Prestwick, the A380 production area in Building No. 4 became the adoptive home for the build of the Airbus A320 aft fixed fairings prior to transferring the work to Spirit Malaysia in Subang. The newly formed team quickly realized there was an opportunity to improve the manufacturing process while familiarizing employees with Spirit s procedures. Of the process improvements made, the most significant was a 50 percent reduction in the cycle time for the Hysol cure process the adhesive process used under high temperatures for composite structures. The team also demonstrated its capability to build almost double the originally estimated number of aft fixed fairing sets per week. FIRST KEY MILESTONE Spirit recently completed building the first under-wing panel assembly at its new Malaysia facility at Subang, near Kuala Lumpor. The A320 panel was moved from the jig operation processes, to painting, and then into final assembly, where it was completed Feb. 25. Members of the Spirit Malaysia team commemorated the event by signing the assembly part (see cover). They were joined by Neil McManus, Spirit Europe s vice president/managing director; John Lewelling, Spirit senior vice president/general manager of the AeroStructures 4 MOMENTUM

5 Segment; and Francis Hiew, Spirit Malaysia managing director. Spirit Europe, the European division of Spirit AeroSystems, announced in late 2007 it had chosen Malaysia as the site for its first aerospace manufacturing facility in Asia. The initial 242,000-squarefoot facility was slated to be operational by the first quarter of 2009 and stayed true to that timeline. The first Spirit employees to work at the facility near Kuala Lumpur moved into the building in January PHYSICALLY SPEAKING The state-of-the-art facility has a unique architectural design, mostly for functional purposes. In Malaysia, which is near the equator, weather can play a major factor. Downpours frequently can last for more than an hour, and it is typically 85 degrees year-round. Because of these conditions, architects chose to take advantage of the tropical climate when coming up with the design of the building. Built into the exterior is a car canopy to protect automobiles from rain downpours, and overhangs were integrated to take advantage of the natural lighting in the area and cut down on solar gain. While many local considerations were taken into account when designing the facility, there also was a desire to incorporate a traditional Spirit feel. There is a familiar blue overhang around the exterior of the building, which is Spirit Malaysia s first workers arrived on site in January, reminiscent of the look of many of Spirit s other worldwide facilities. We really tried to integrate both the local culture, and the corporate feel of Spirit, while keeping the facility as functional as possible, said Ron Redford, Spirit site planning and new business. Spirit partnered with design/build firm Haskell, based out of Jacksonville, Fla., and Sunway of Kuala Lumpur, Malaysia, to create the unique building design. The Malaysian facility will initially produce a number of composite aerospace wing subassemblies for commercial aircraft, and will operate under the name Spirit AeroSystems Malaysia Sdn Bhd. When fully operational, it will employ in excess of 450 employees in a variety of assembly, manufacturing, engineering, commercial and support roles. spiritaero.com 5

6 P-8A TAKES FIRST FLIGHT This P-8A Poseidon test aircraft took to the skies on April 25. Spirit AeroSystems builds the fuselage for the aircraft, which is a derivative of the Next-Generation built for the U.S. Navy. THE FIRST FLIGHT OF THE P-8A IS A MAJOR MILESTONE ON THIS PR THE CULMINATION OF A GREAT TEAM EFFORT, WHICH INCLUDED SP The first painted P-8A Poseidon aircraft rolls out of the paint hangar at Boeing s Renton, Wash., facility on April 20, displaying its new U.S. Navy livery. 6 MOMENTUM

7 SUCCESSFUL FIRST FLIGHT IS SIGNIFICANT The Boeing P-8A Poseidon test aircraft T-1 successfully completed its first flight April 25 after taking off from Renton Field near Seattle, logging three hours and 31 minutes in the air, then touching down at nearby Boeing Field. The test aircraft completed a limited series of flight checks and reached a maximum altitude of 25,000 feet. The P-8A is a long-range anti-submarine warfare, intelligence, surveillance and reconnaissance aircraft. Spirit, which is part of a Boeing-led industry team, built the aircraft s fuselage in Wichita. The P-8A is a military derivative of the Next-Generation The U.S. Navy plans to purchase 108 P-8As to replace its P-3C aircraft fleet. ROGRAM... THIS SUCCESS IS PIRIT AS A KEY PARTNER. This is a significant accomplishment for the P-8A team, as it moves us one step closer to delivering the next maritime patrol and reconnaissance aircraft to the warfighter, said Capt. Mike Moran, U.S. Navy P-8A program manager. I commend Boeing for putting its A-Team in place on this program and enabling the Navy to leverage Boeing s experience, expertise and, more importantly, dedication to make this aircraft a reality. John Pricco, vice president, P-8A Program at Boeing Commercial Airplanes said, There s a lot of attention around first flight, but it s the culmination of a lot of people; their dedication, their innovation, and their hard work. Not just at Boeing, but across our industry team. The integrated Navy/Boeing team will begin formal flight testing of the submarine hunter during the third quarter this year. Before that, Boeing will paint the aircraft, install additional flight-test instrumentation and conduct a series of ground tests. The first flight of the P-8A is a major milestone on this program, and it occurred two days ahead of schedule, said Mike Schwamman, Spirit P-8A program director. This success is the culmination of a great team effort, which included Spirit as a key partner. I thank everyone at Spirit who contributed to this success. Spirit successfully delivered the first P-8A Poseidon aircraft fuselage to Boeing in March That delivery marked the first time a commercial jetliner fuselage destined for military service had undergone customization as it was being assembled, rather than after the initial fabrication was completed. Although the fuselage Spirit builds looks almost identical to its commercial cousin, the military derivative does not include passenger windows except for one used for observation. The fuselage structure has been reinforced for its military mission and a weapons bay door added to its underside. The U.S. Navy awarded Boeing a $3.9 billion system development contract to build five test aircraft and to develop and integrate software and mission systems equipment. Partners on the industry team include CFM International, Northrop Grumman, Raytheon, Spirit AeroSystems and GE Aviation. Initial deployment is scheduled for MIKE SCHWAMMAN, SPIRIT P-8A PROGRAM DIRECTOR spiritaero.com 7

8 TULSA S BIG PROJECT AEROSTRUCTURES BUSINESS UNIT IN TULSA, OKLA. A new autoclave was constructed as part of the renovation of Building 119 at Spirit s Tulsa, Okla., facility. spirit s Aerostructures Business Unit in Tulsa, Okla., has recently been busy completing a major building refurbishment project. The building, known as Building 119, is a 44,000-square-foot facility at the Tulsa International Airport. It is attached to the east side of a former Air Force plant owned by the City of Tulsa. The $17.4 million investment to refurbish and expand the building was a partnership between Spirit, the State of Oklahoma, the City of Tulsa s International Airport Trust and the United States Air Force. The refurbishment and expansion will allow Spirit to meet new customer demands for manufacturing and bonding in commercial and government contracts. To facilitate the project, Oklahoma s Gov. Brad Henry tapped the state s Opportunity Fund, an economic development account he helped create in 2006 to assist with job creation projects. Recently, he noted that the use of the Opportunity Fund money to expand an existing industry was critical to the growth of the sector. 8 MOMENTUM

9 FACT FILE: AEROSTRUCTURES BUSINESS UNIT - TULSA, OKLAHOMA HISTORICAL WORK PACKAGES (selected) 1960s 1970s 1980s 1990s 2000s Saturn II and Apollo, 747 wing Bell 301 and Space Shuttle, Peacekeeper Missile B-1 Bomber, X-31 Boeing 777 floor beams and slats, Next-Generation 737 wing components. Joint Strike Fighter, X-33, International Space Station, and AWACS Radome. Boeing 787 wing leading edge, AC-130 Gunship, UCAV X-45C, Gulfstream G650 and G250 wing CURRENT CAPABILITIES (selected) 136,000 square feet of environmentally clean bond rooms 8 autoclaves from 5 to 20 diameter, x 70 length Non-autoclave resin injection processing Metallic and non-metallic core fabrication Metal, fiberglass and carbon epoxy bond fabrication Robotic drilling cells Abrasive waterjet trim cell Structural machining centers; 5-axis gantries Material processes: phosphoric acid anodizing, bond priming, vapor degrease, flame spray By expanding the space with manufacturing and bonding capabilities, Spirit bid on and won additional contract work. New program work begun at the end of March as planned, and new jobs were created as a result of the renovation and reactivation plan. A ribbon cutting ceremony was held to commemorate the opening of the refurbished building at Spirit s Tulsa, Okla., facility. spiritaero.com 9

10 CELEBRATING 6,000 The 6,000th Boeing Next-Generation 737 fuselage is shipped by railcar from Spirit s Wichita, Kan., facility to Boeing s Renton, Wash., facility. 737 PRODUCTION SPANS MORE THAN FOUR DECADES IN WICHITA When the 6,000th Boeing 737 single-aisle fuselage set off for its journey to Renton, Wash., for final assembly, casual observers might have concluded it looked about the same as its predecessors manufactured in Wichita over the last few decades. There was little fanfare as it was placed on a railcar platform for its trip to the Pacific Northwest. Indeed, it was shaped in the same fashion as the one before it, as was the fuselage next in line. But the evolution of the from its Classic configuration in the late 1960s to today as a re-engineered New Generation aircraft has been transformative for everyone affected by this aircraft, which is considered to be the world s most popular and reliable commercial jetliner. The 6,000th fuselage leaving Wichita s Spirit plant to Boeing added another statistic to the record books: It s the 2,868th Next-Generation line unit assembled here. That number follows the 3,132 Classic line units built by Boeing and its suppliers beginning in In Wichita, Spirit has approximately 2,700 employees who build the air fleet workhorse. They use processes and skills that have been refined and adapted over the decades to increase productivity, improve quality and safeguard lives of the people who ll fly in those aircraft. The 737 is the best-selling commercial jetliner in aviation history, having won orders from more than 245 customers worldwide. 10 MOMENTUM

11 ROOKIES of the YEAR STUDENTS TEAM UP TO DELIVER WORLD-CLASS PROJECTS Spirit AeroSystems joined forces with the University of Manchester and Wichita State University (WSU) to deliver a pilot program entitled Spirit s Global Design Challenge with the challenge being to design an aircraft fuselage. Associate Processor Larry Whitman of WSU said, The engineering industry needs graduates with more than just technical skills. A key component for today s graduate is the ability to thrive in a globally collaborative workplace. The initiative provides students the opportunity to obtain work experience and apply their learning to a real-world environment. In addition, the participants also get the chance to develop entirely different, but complimentary and transferable skills such as project planning, problem solving, risk management, time management, and communication skills in a global environment. ABOVE: A GROUP OF STUDENTS FROM WICHITA STATE UNIVERSITY AND THE UNIVERSITY OF MANCHESTER COMPETED IN A GLOBAL DESIGN CHALLENGE. The two teams were a mix of engineering students from the two universities. Both teams had the opportunity to visit each others country and place of study prior to the competition starting. Communication after the site visits were done via teleconference and during the three-month collaborative period. Program judges described the submissions from both teams as unique and very interesting, with the students analysis of problems and approach to finding innovative solutions following the true intent of the project. The winning team, named Team Vanguard, was honored at an awards ceremony in February in Wichita. Organizers said Spirit and the pilot program college sponsors will participate in a second competition planned for later this year. A university from Malaysia, where Spirit Europe recently opened a facility, is also expected to join the competition. spiritaero.com 11

12 COMMUNITY SPIRIT Representatives from Wichita Habitat for Humanity and Spirit AeroSystems assist the Minter family in the groundbreaking of what will soon be their new home. SPOTLIGHT ON WICHITA A special groundbreaking ceremony in April celebrated Spirit AeroSystems first sponsorship of a Wichita Habitat for Humanity home. The company demonstrated community leadership by partnering with the local Habitat affiliate to contribute funds and volunteers to construct a home for a local family. Even during challenging economic times, Spirit AeroSystems is committed to serving the Wichita community through collaborative partnerships that enhance and strengthen the quality of life in Kansas. Spirit s corporate giving philosophy has always been to give back to the communities where our employees live, said Spirit s Public Affairs Manager Brian Black. Giving back through Habitat for Humanity is a wonderful opportunity to combine corporate giving with the generosity of Spirit s employee volunteers. Construction on the project, done primarily by Spirit employee volunteers and their families, will take place June 19 through September 12. Hundreds of Spirit Wichita employees and their families participated in the Wichita River Festival, a week-long community celebration. Spirit s parade entry won first prize for the inflatable balloon category; the balloon has affectionately been named Spirit One by employees. Spirit was also a corporate sponsor for the Festival s concert which brought musical artist Dr. Hook to the West Bank Stage on the Arkansas River. SPOTLIGHT ON U.K. Working with the Ayrshire Rivers Trust, Spirit Europe has continued its sponsorship of the Salmon in the Classroom initiative, which introduces wild salmon back into local rivers in the Ayrshire community. In 2009, Spirit Europe sponsored two primary schools: Drongan in East Ayrshire and Monkton in South Ayrshire. The first phase of the project has been completed: the delivery of 100 salmon eggs into the classroom. After a presentation from the Rivers Trust on how to care for the eggs, the schoolchildren eagerly took ownership. Once hatched, a visit to a local riverbank will be arranged with for the students so they can release the young fish in to the river. This will be followed by another visit to the river in June, giving the children the opportunity to assess the progress of their fish and learn more about what lives in the rivers and learn about helping keep the habitat clean. Coreen McCubbin, a stress engineer at Spirit Europe, supported the Ayr Grammar Primary school during its World of Work Week in February when parents were asked to go into school and talk about their jobs. During the day, McCubbin gave a presentation to the children on her role within Spirit and her previous experience in both the military and civil aerospace business. Later, the children had the opportunity to design and build a model airplane using balsa wood, compressed polystyrene, a rotor kit and a rubber band. 12 MOMENTUM

13 SPOTLIGHT ON OKLAHOMA Spirit s Oklahoma facilities recently donated world-class materials to Oklahoma State University (OSU); materials which will be used for cutting-edge engineering research programs. The materials, which are rolls of carbon fabric, will be used to make composite laminates for investigating the effects of environmental exposure and studying aerospace-grade materials. Spirit s relationship with OSU Engineering began years ago when it provided a lead sponsorship for the Design, Build and Fly competition to help OSU students purchase materials needed to compete. This initial contribution and support, a tradition Spirit AeroSystems has built upon, has helped form an award-winning OSU team a legacy that continues today. This competition is exactly what Spirit AeroSystems does, says Mark Walker, Spirit AeroSystems representative. We re not just handing over a check; we re making an investment in our state and the future of our company. The competition includes designing, building, and flying a final product, and it is no accident that Spirit employs some of the winning team members at its facilities. OSU works with Oklahoma employers to train and retain top-talented students. Spirit s investment in OSU has grown from a student scholarship to competition sponsorships, employee recruitment and in-kind donations of premier aerospace equipment. Spirit benefits from its relationship with OSU in the recruitment of new talent for its team of more than 2,500 employees in Oklahoma. Beyond engineers, Spirit looks to OSU for top-performing accounting and business students to maintain Spirit s position at the forefront of the industry. ABOVE: SPIRIT CURRENTLY EMPLOYS A NUMBER OF GRADUATES FROM OKLAHOMA STATE UNIVERSITY. BELOW: STUDENTS IN THE UK PARTICIPATE IN THE SALMON IN THE CLASSROOM INITIATIVE. spiritaero.com 13

14 1ST QUARTER 2009 RESULTS Employees at Spirit s Wichita, Kan., facility work on a Boeing Next-Generation 737 fuselage section. Spirit AeroSystems Holdings, Inc. reported first-quarter financial results reflecting solid operating performance as the company returned to full-rate production by the end of the quarter following the International Association of Machinists and Aerospace Workers (IAM) strike at The Boeing Company in the third and fourth quarters of Spirit s first-quarter 2009 revenues were $887 million and operating income was $98 million, as the impact from the Machinists strike at Boeing carried over into the first quarter of 2009, resulting in reduced unit delivery volumes, revenues and earnings compared to the first quarter of Net income for the first quarter of 2009 was $63 million, or 45 cents per fully diluted share, compared to $85 million, or 61 cents per fully diluted share, for the same period in During the first quarter of 2009, Spirit gradually returned to full-rate production following the Machinists strike at Boeing. Spirit continued to utilize a reduced work week schedule early in the first quarter and returned to full work weeks as the quarter progressed. As a result, first-quarter 2009 ship-set deliveries to Boeing were 30 units below pre-strike delivery levels, resulting in a revenue reduction of $256 million and a reduction in earnings per share of 18 cents. The first-quarter results reflect solid operating performance as we managed through the residual impact of the Machinists strike at Boeing, said President and Chief Executive Officer Jeff Turner. Our team has done an outstanding job of adjusting to the challenges posed by the Machinists strike. Those adjustments included balancing the requirements of our customers, shareholders, employees and communities, while staying focused and maintaining the health of our business through a difficult period. Looking forward, we are now in a period where the endmarket for our core products is being impacted by the economic challenges facing communities and countries around the world. We will continue to manage resources prudently given these uncertain times, while focusing on meeting our commitments to our customers. Maintaining our customer focus and managing well through the cycle will enable Spirit to realize the long-term plan for value creation we have established over the past four years, Turner concluded. 14 MOMENTUM

15 Spirit s backlog decreased by approximately 7 percent during the first quarter of 2009, as deliveries exceeded orders and new business wins for the first time since the company was formed in June The company continues to pursue new business opportunities in commercial aerospace and defense markets. The company s backlog at the end of the first quarter was $29.6 billion. Spirit s backlog is calculated based on contractual prices for products and volumes from the published fir-order backlogs of Boeing and Airbus, along with firm orders from other customers. Spirit updated its contract profitability estimates during the first quarter of 2009, resulting in a $3 million unfavorable cumulative catch-up adjustment. Spirit recognized a $2 million favorable cumulative catch-up adjustment during the first quarter of On April 29, 2009, Textron s Cessna Aircraft division announced the suspension of the Citation Columbus development program because of difficult conditions in the business jet market. Given the program suspension, and at Cessna s direction, Spirit is suspending work immediately on its design and build efforts in support of the Columbus program. Spirit remains confident in the viability of this program over the long term and anticipates its restart at the appropriate time. Complete first-quarter results can be accessed at Spirit s external web site at STOCK WATCH The charts below show the stock price of Spirit compared to the S&P 500 index, the S&P 500 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 became a public entity. Each data point represents the end of a trade day. Spirit vs. other U.S.-based aerospace suppliers Spirit vs. stock indexes and other aerospace suppliers Comparisons: 4-WEEK, Comparison since SPR IPO Price/value as of 4/30/ SPIRIT TIER 1 AEROSPACE SUPPLIERS Boeing Goodrich Hexcel 9.59 Honeywell Precision Cast Parts Rockwell Collins United Technologies U.S. STOCK INDEXES S&P S&P 500 Aerospace and Defense Index * SPR IPO price, all others closing price as of 11/21/06 Four-week Comparison Price/value as of 4/02/ Percent Change 16.5% 7.7% 10.9% 30.3% 2.1% 20.3% 11.3% 6.3% 4.6% 9.5% Comparison since SPR IPO Price/value as of 11/21/06* , Percent Change -51.0% -56.0% -1.9% -43.6% -27.3% -0.8% -35.7% -25.8% -37.8% -30.5% spiritaero.com 15

16 Headquarters 3801 S. Oliver St. Wichita, KS Phone: (316) Toll Free: (800)