Spirit Aerosystems Stock Price
Spirit Aerosystems Stock Price : On December 19th, 2019 The Wichita Eagle’s headline read: “Spirit AeroSystems to add 1,400 more jobs in Wichita, president says.” The Spirit president’s claim, adding on to the “1,000 jobs and $1 billion in infrastructure” he had assured a year before, was a bold one. The company was already Wichita’s largest employer, and he was betting on the company’s success to increase even further.
This promise was made just under two months after their main customer, Boeing, faced catastrophe when a brand-new 737 MAX, equipped with fuselage manufactured by Spirit, crashed into the Java Sea, killing all one hundred and eighty-nine people on board. All investigations into the incident came up fruitless, leaving the situation with no resolution. Yet the president of Spirit put his trust behind Boeing and continued to grow the already-towering presence of their manufacturing plant in Wichita.
And just months later, after the words had long left the president’s mouth, it happened again. A Boeing 737 MAX, brand-new, with a hull manufactured in Wichita like all the others, crashed six minutes after leaving Addis Ababa. Ethiopian Airlines, the damaged client, grounded all of their MAX’s, and all other airlines soon followed. Boeing had taken a nosedive.
Boeing had expected the 737 MAX to face bottomless demand, an expectation which was clearly echoed by Spirit. After the second incident, however, they dropped production numbers significantly—by about 20%—despite a long production waitlist from before the incidents. Spirit obviously felt the effect of this drop, as their fuselage is a major component of the plane. Yet Spirit valiantly announced that they would do their best to protect their employees from layoffs, reducing all other costs before slashing the payroll.
What makes this especially dignifying for Spirit is that the issue had nothing to do with their manufacturing.
The suspected issue was one with the software installed exclusively on the MAX. The “Maneuvering Characteristics Augmentation System,” which recorded erroneous data, pushed the aircraft nose down and overrode the pilots’ controls. Officials noted that the MCAS relied on only one external sensor, a clear design flaw. The MCAS is currently being repaired; however, just yesterday, it became public that the Federal Aviation Administration ran into yet another problem with the 737 MAX: in a simulation, the flight computer’s data processing made the plane go into another uncontrollable dive. Public approval of Boeing has followed suit.
With no liability, Spirit AeroSystems as a corporation suffered from nothing but bad luck, facing decline in place of their expected growth, even though it was Boeing making reparations, tampering with the software and training staff to override the system.
Now with the onset of Covid Spirit saw their stock drop to below $20 per share in 2020 to rebound significantly with the rest of the small and mid cap US value stocks.
This goes to show that technology is not invulnerable, especially when mixed with some human error.
Even if all the components themselves are in working order, the burden is always on the human to check the output; even as technology grows incredibly powerful, humankind’s common sense remains stagnant.
At the very least, Spirit’s care of its employees was respectable—or it seemed to be, until it received “$200,000 in OSHA fines for alleged carcinogen exposure”(The Witchita Eagle, May 14th 2019).
Written by Devaansh Mahtani, Edited by Paul Luu Van Lang & Alexander Fleiss