Spirit Replacing Faulty Parts

Dec. 13--Spirit AeroSystems has made a lot of progress replacing thousands of faulty fasteners installed on sections of Boeing jetliners at the Wichita factory.

"It looks like now we will be substantially complete, if not totally complete, by the holiday break," said Spirit spokesman Ken Evans.

Spirit discovered a problem with the nutplates -- tiny metal fasteners used to attach wiring and other components inside of fuselages -- about three months ago.

The parts, which had not been coated with an anti-corrosive agent, have been used on Boeing 737, 747, 767 and 777 jetliners since August 2007. Hundreds of planes have been delivered to customers during that time.

In the three months since it discovered the problem, Spirit has been replacing the defective parts on sections to be shipped from Wichita. It also has sent employees to Boeing to help work on planes that were yet to be delivered.

Because Spirit buys nutplates from multiple suppliers, fewer than 30 percent of the nutplates used on Boeing aircraft are defective, the company said.

The defective nutplates came from Precision Castparts, a publicly traded supplier based in Portland, Ore.

"We did make the nutplates, and we're talking with Boeing and Spirit on the issues," Precision spokesman Dwight Weber said.

He declined further comment.

Spirit is no longer buying nutplates from the company, Spirit spokesman Ken Evans said. It had been a supplier to the Wichita plant for at least 20 years, Evans said.

Spirit chief financial officer Rick Schmidt is on Precision Castparts' board of directors. He joined the board in February 2007, Evans said.

Spirit has not fully calculated the cost of replacing the faulty parts, he said.

"But it's significant," he said. "You can imagine when you have a need to address an issue like this, and you need to put teams of people on it for an extended period of time for several weeks," he said. "You're going to have a substantial cost associated with that."

It's not yet known which company will ultimately be financially responsible for the problem.

"It's too soon to say," Evans said. Spirit is talking with the supplier and with Boeing.

American Technology Research analyst Peter Arment said the financial impact is difficult to gauge.

"There will be some sort of negotiation," Arment said. "They're going to look into exactly what was the reason behind it. It's pure speculation... who's going to be paying for that."

The number of Spirit employees working on the issue has declined significantly, Evans said.

"We've been making very good progress," he said.

The nutplate issue has not delayed Spirit deliveries to Boeing.

Boeing is working with customers who have taken delivery of planes with the faulty nutplates installed.

Those planes likely will have the parts replaced during regularly scheduled heavy maintenance, the company has said.

"Spirit has not been brought into the process at this point," Evans said.

Reach Molly McMillin at 316-269-6708 or [email protected].