World News

Spirit Aero CFO resigns on accounting irregularity, shares fall 7%

By Sanjana Shivdas

(Reuters) – Spirit AeroSystems <SPR.N> on Thursday said its chief financial officer had resigned after the company identified some accounting irregularities, adding to the woes of the aero-parts maker as it grapples with the 737 MAX crisis.

Spirit shares fell almost 7% in premarket trade after the company said its accounts did not comply with standard protocol related to certain potential contingent liabilities in the third quarter last year.

Mark Suchinski, vice president of quality and former principal accounting officer at the company, has replaced Jose Garcia as chief financial officer (CFO).

The company said both its CFO as well as its current principal accounting officer, John Gilson, have handed in their resignations.

The matter is not expected to materially affect the company’s financial statements for the year ended Dec. 31, 2019, Spirit said.

“However, the review is ongoing and no final conclusion has been made,” Spirit said, adding that it would cooperate with any inquiries the U.S. Securities and Exchange Commission may have.

Separately, the company said it reached a deal with its largest customer, Boeing, to gradually restart production of 737 MAX parts and deliver 216 shipsets in 2020.

Spirit, which had halted production of the MAX parts on Jan. 1, did not specify a date for restarting production.

Boeing on Wednesday said it was expecting to resume MAX production ahead of a regulatory approval for the jet’s return to service by mid-2020.

Spirit will produce an average 18 shipsets — a complete set of parts for each aircraft — per month for the full-year, down from 52 in 2019.

“Spirit does not expect to achieve a production rate of 52 shipsets per month until late 2022,” the company said in statement.

Boeing halted the MAX’s production this month, which has been grounded for more than 10 months following two fatal crashes that killed 346 people.

Spirit builds the fuselage, thrust reversers, engine pylons and wing components for the 737 MAX, which account for more than 50% of its over $7 billion annual revenue.

(Reporting by Sanjana Shivdas in Bengaluru; Editing by Anil D’Silva and Vinay Dwivedi)