Tuesday, January 06, 2015

Triumph Group closes deal with Spirit AeroSystems

Triumph Group announced Monday the closing of its agreement with Spirit AeroSystems Inc. to take over production of Gulfstream G650 and G280 wing programs located in Tulsa.

The deal between the aerospace companies closed Dec. 30. The business will operate as Triumph Aerostructures-Vought Aircraft Division-Tulsa.

To cover anticipated future cash needs of the program, Triumph received $160 million cash plus required assets from Spirit AeroSystems.

Berwyn, Pennsylvania-based Triumph said it does not expect to make additional capital contributions.

The close of the deal comes after what appeared to be a harrowing sale process for Wichita-based Spirit AeroSystems. The company put operations at its Oklahoma plants up for sale in August 2013.

On Dec. 9, 2014, Spirit announced the deal with Triumph to transfer the Gulfstream wing operations at its Tulsa plant but said it was “taking a pause” in the sale process to evaluate the remaining work in other Tulsa programs.

Between 800 and 900 employees work on Gulfstream wing projects at Spirit’s Tulsa plant. Triumph has said all those employees will be offered contracts with the company.

“We are confident that we can execute these programs effectively and look forward to working with the outstanding group of employees in Tulsa to drive improvements and deliver long-term value from these programs,” said Jeffry D. Frisby, president and CEO at Triumph.

As previously reported, Spirit AeroSystems said that layoffs were possible if employees make the individual decision to not accept offers from Triumph.

“If they have seniority per the collective bargaining agreement and choose to reject the offer from Triumph, they may displace a junior employee working on other programs at Spirit,” Spirit AeroSystems spokesman Jarrod Bartlett said on Dec. 9.

The Tulsa World asked Spirit AeroSystems on Monday for any updates available on the possibility of layoffs. At press time, no new information was available from Spirit.

Triumph says it expects the newly acquired business to add $250 million to its annual revenue and to increase earnings per share.

Triumph said it plans to update its fiscal year 2015 guidance to reflect the financial impact of the wing program transfer later this month when it releases third quarter fiscal year 2015 earnings.

Spirit AeroSystems: Tulsa Timeline

May 2003: Boeing announces sale of Wichita division, including Tulsa

June 2005: Boeing sells plants to Onex Corp., company renamed Spirit AeroSystems

Aug. 2013: Spirit AeroSystems puts Tulsa and McAlester facilities up for sale

Sept. 28, 2014: United Aerospace Workers Local 952 members working on Gulfstream programs vote overwhelmingly to reject a new or revised contract. Rumors swirl that a sale of some programs at Spirit's Tulsa plant could occur as early as Sept. 30

Dec. 9: Spirit AeroSystems announces the transfer of the Gulfstream wing projects at its Tulsa facility to Pennsylvania-based Triumph Group Inc.

Dec. 30: The transfer of Tulsa plant Gulfstream wing programs from Spirit AeroSystems to Triumph Group is finalized.

Original article can be found at: http://www.tulsaworld.com

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