In a recent report, Spirit AeroSystems, a major aerospace manufacturer indicated that it is potentially facing severe operational challenges which may have implications for Boeing’s planned purchase of the company. The recent disclosure unveils a considerable level of doubt regarding the company’s future financial viability.
So far, Spirit AeroSystems has reported a substantial net loss of $1.5 billion this year, and the company predicts a cash burn of somewhere between $450 and $550 million across the next year. Additionally, the company’s accumulated debt reached $4.4 billion as the third quarter closed, with cash holdings of less than $22 million.
It attributes its fiscal issues partly to various problems with both Boeing and Airbus. The company’s financial footing has been notably impacted by Boeing turning away deliveries that needed further assembly or quality revisions, adversely affecting Spirit’s cash flow. Slow production ramp-up by Boeing, ongoing pricy adjustments debates with Airbus, and a Boeing strike also played significant roles in Spirit’s current predicament.
While talks about its acquisition by Boeing is ongoing, the full consequences of Spirit’s recent financial report on the acquisition’s financial aspect remain uncertain. Boeing may have to further boost Spirit’s capital, suggests a note from Bank of America analysts. Boeing had previously loaned Spirit AeroSystems $425 million in 2024 to strengthen its liquidity. Spirit also managed to raise over $2.4 billion last month and has completely expended a $350 million bridge loan obtained when Boeing agreed to the acquisition in June.
Despite these challenges, Boeing is set on restarting the production of the 737 MAX following the end of a large-scale strike disrupting the manufacturing of Boeing’s main commercial jets, including the 737 model.
