Spirit AeroSystems to Transfer Wing Business -- Update

By Chelsey Dulaney 

Spirit AeroSystems Holdings Inc. said Tuesday that it has agreed to transfer its Tulsa wing-part assembly business to Triumph Group Inc., after searching for a buyer for the costly site for more than a year.

Under the terms of the transfer, which includes both the G650 and G280 Gulfstream wing programs, Spirit will make a $160 million cash payment to Triumph. The transfer carries and estimated loss of $205 million to $235 million for Spirit, but is expected to generate a cash tax benefit of $220 million to $230 million.

The plant fabricates wing parts for Gulfstream Aerospace Corp., a unit of General Dynamics Corp., but has been hurt by cost overruns. Like Boeing Co., Gulfstream has also recently moved the design and manufacture of some of its wings in-house in a move to speed development.

Spirit announced plans to sell the plant, along with another Oklahoma facility, in August 2013 after a strategic review of its operations under Chief Executive Larry Lawson, who took over the previous April.

Spirit received a surprising amount of interest in the sites, Mr. Lawson said in November 2013.

Meanwhile, Spirit has continued to aggressively cut its internal costs and on Tuesday said it would evaluate the remaining work at its other Tulsa programs.

"There are a number of factors to take into consideration, including exploring our options within the community and with other constituents who have approached us. We won't rush the evaluation and will provide an update as soon as we are ready," Mr. Lawson said in a statement.

Triumph, for its part, estimates that the Gulfstream programs will immediately add to its per-share earnings and could contribute about $250 million in annual revenue.

The deal is expected to close by the end of the year.

Write to Chelsey Dulaney at [e-mail]

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