After more than a year of issues that included parts shortages, a labor strike and quality defects, Spirit AeroSystems is again in the hot seat following the Jan. 5 Alaska Airlines incident.
Scrutiny on the Boeing supplier escalated after the Federal Aviation Administration announced Friday it would increase oversight of Boeing and its suppliers’ production and manufacturing operations, following the midflight blowout of an Alaska Airlines-operated 737-9 Max plane door plug.
Further fueling the fire is a lawsuit Spirit shareholders filed against the contract manufacturer last month after, “defendants concealed from investors that Spirit suffered from widespread and sustained quality failures,” according to a court document dated Dec. 19. These failures included the presence of debris in Spirit products, missing fasteners, peeling paint and poor skin quality.
The suit lists several quality issues at the contract manufacturer, dating back to at least 2018. “Quality failures” at Spirit became so severe that from 2018 to at least 2021, Boeing put the supplier on probation, according to the filing, meaning the company couldn’t ship any product to Boeing without manager approval.
“Such constant quality failures resulted in part from Spirit’s culture which prioritized production numbers and short-term financial outcomes over product quality, and Spirit’s related failure to hire sufficient personnel to deliver quality products at the rates demanded by Spirit and its customers including Boeing,” the plaintiffs write in the suit.
More recent incidents listed in the suit include that in April 2023, Boeing reported a defect related to the tail fin fittings on some 737 aircraft, which was eventually attributed to improper installation. Quality issues on the aft fuselage section of certain 737 models were also reported.
To help recover program production, Boeing sent manufacturing and engineering resources to Spirit, as well as a cash advance to aid with the repair process.
Another report in August identified mis-drilled fastener holes. In the December filing, an employee noted that holes should be drilled straight, but were instead drilled at an angle. Although the supplier noted it would implement changes to its manufacturing process, Spirit didn’t specify exactly what that would entail.
Lawsuit alleges Spirit has ‘an emphasis on pushing out product over quality’
Other internal employees also raised alarm bells surrounding quality failures at Spirit, adding evidence that the contract manufacturer knew of the pervasive problems, per the lawsuit.
One employee said that Spirit’s culture, “placed an emphasis on pushing out product over quality,” and was told not to find significant defects at the end of the production line as the supplier, “wanted to ship its completed products as quickly as possible,” according to the lawsuit.
In one February 2022 employee report to Spirit’s ethics hotline, a manager instructed the employee to change the way they documented defects so as to limit their number. “I raised my concerns because this challenges our integrity because we are being asked to purposely record inaccurate information,” the employee wrote in the report.
In a court-published email to then-CEO Thomas Gentile in March 2022, the same employee stated that, “I have lost faith on the quality organization here at spirit and this is my last cry for help,” referring to unsuccessful attempts to resolve compliance complaints.
“It's been three weeks since the compliance was filed and i have not seen any response. Since then I been stripped from my team lead position and my team has been left intimidated and without a voice to speak up,” the employee wrote in the email.
When asked about quality issues during a conference in September, Gentile said that, “escapes happen, and they happen on all programs. They usually don’t get this much attention.”
“We have a quality management system that actively and continuously seeks out quality issues so that we can fix them and make our products with better quality and safer in terms of outcome,” Gentile said during the conference.
Gentile resigned from his post weeks later and Patrick Shanahan was named interim president and CEO.
When asked about the lawsuit allegations, Spirit told Supply Chain Dive in a Jan. 12 email, “Spirit strongly disagrees with the assertions made by plaintiffs in the amended complaint and intends to vigorously defend against the claims. Spirit will not comment further as to the pending litigation.”
December’s court filing isn’t the only lawsuit Spirit has faced in the past year.
In August, a U.S. appeals court upheld the rejection of an investor lawsuit accusing Spirit of misleading investors about 737 Max production cuts following two crashes in 2018 and 2019.
A class action lawsuit was also filed in May regarding alleged “faulty production controls and the alleged incorect installation of fittings on certain B737 MAX planes,” according to a recent 10-Q filing.
