Spirit AeroSystems Names Tom Gentile CEO -- 2nd Update
June 08 2016 - 1:31PM
Dow Jones News
By Jon Ostrower
Spirit AeroSystems Holdings Inc. on Wednesday said Chief
Executive Larry Lawson will retire at the end of July and be
replaced by Tom Gentile, who was hired by the aerospace supplier
four months ago, triggering speculation about a possible
succession.
Mr. Gentile joined as Chief Operating Officer in April from
General Electric Co., and his elevation was sooner-than-expected by
analysts after a period of upheaval at Spirit, a big supplier on
key jetliner programs at Boeing Co. and Airbus Group SE.
Spirit has restructured in recent years, shedding unprofitable
work on business jets, winning new defense business and cutting
costs under pressure from the big commercial plane makers that are
boosting production following a multiyear order boom by airlines
and leasing companies.
The moves earned Mr. Lawson, 58, plaudits on Wall Street.
Spirit's stock price has more than doubled since the former
Lockheed Martin Corp. executive took charge in 2013.
News of Mr. Lawson's departure sent its shares down 3.1% to $46
by noon Wednesday in New York. Over the past three years, the
company has recorded annual declines in sales, including a 2.3%
slip last year.
Mr. Gentile, 51, takes the reins as Spirit enters a period of
significant growth. It is in the early phases of transitioning its
production lines to build more fuselages and other parts for
Boeing's updated 737 Max jetliner. The jet has been in test flights
since January and delivers to Southwest Airlines Co. next year.
Spirit, in lockstep with Boeing, will be raising monthly production
from 42 currently to 57 in 2019.
Internally, Mr. Lawson earned a reputation as domineering
manager, according to present and former staff. This was viewed as
a contrast to his predecessor, Jeffrey Turner, a veteran Boeing
plant manager who took the company from a regional unit of the
aerospace giant in 2005 to a stand-alone business.
Many senior company leaders had departed over the last 18
months, including its former chief financial officer, head of
strategy and executive vice president of its Boeing, business and
regional jet programs.
A Spirit spokesman declined to comment on Mr. Lawson's
leadership style, but cited an earlier statement by the company's
chairman Bob Johnson. Mr. Johnson called Mr. Lawson "a tremendous
leader for Spirit. Under Larry's leadership the company's financial
health has greatly improved, as has its operational
performance."
Mr. Lawson's departure comes as Spirit remains in contract talks
with its biggest customers and "his sudden decision to go with
contract negotiations with Boeing and Airbus unresolved is
puzzling," said Cai von Rumohr, aerospace analyst at Cowen &
Co.
Left unresolved is a revised master contract with Boeing, by far
its biggest customer, for which it makes everything from complete
737 fuselages -- shipped by rail to the Seattle area -- to engine
pods and fully outfitted sections of the company's 787 Dreamliner.
The companies haven't agreed on future pricing for new models of
both jets.
Spirit's statement and spokesman offered no further explanation
for the timing of the announcement, saying only "the time is
right." Mr. Lawson will remain a consultant to the company for two
years.
"I've spent the last couple of months deeply embedded in the
business -- visiting the sites, meeting the teams, and assessing
Spirit's expertise, capabilities and opportunities for growth," Mr.
Gentile said in a statement.
Mr. Gentile started with Spirit AeroSystems in April, taking
charge of all programs in addition to aspects of engineering,
operations and business development. His hiring coincided with
reports the company was seeking a chief operating officer as part
of a potential succession plan for the CEO.
Mr. Gentile spent two decades with GE, including roles as chief
executive of GE Aviation's services division and chief executive of
GE Healthcare Systems. Before GE, he spent more than five years
with McKinsey & Co.
--Anne Steele contributed to this article.
Write to Jon Ostrower at jon.ostrower@wsj.com
(END) Dow Jones Newswires
June 08, 2016 13:16 ET (17:16 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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