LOS ANGELES CPI
Aerostructures Inc. has extended a business jet manufacturing
deal as it looks to build non-military business in the midst of
federal budget sequestration.
Edgewood, N.J.-based CPI has
reached an agreement with first-tier aerospace contractor
Spirit AeroSystems Inc., Wichita, Kan., that will extend its
contract for manufacturing wing leading edge assemblies for a
business jet aircraft through 2019. The contract, originally
signed in 2008, had been due to expire at the end of this
CPI, citing confidentiality
restraints, declined to specify the aircraft program, the
dollar amount of the contract or the number of units
However, both CPI and Spirit
separately list the Gulfstream 650 built by the Gulfstream
Aerospace Corp. unit of General Dynamics Corp., Savannah, Ga.,
as among the programs in which they participate.
The Gulfstream jets wing
is believed to be built primarily of aluminum with a skin of
formed aluminum sheet, while the ribs and internal parts are
machined. The wing also has a composite framing piece that
attaches to the planes fuselage.
Despite posting record net
income of $11 million and revenue of $89.3 million for 2012,
CPI president and chief executive officer Edward J. Fred said
the companys results last year had already been affected
by the "looming threat of forced, across-the-board government
spending cuts," or sequestration.
Fred cited "delayed contract
decisions by many prime contractors in the aerospace and
defense sector, including our customers" with the possibility
that "releases on previously awarded contracts could be
CPI has "noticed a slowing of
the process of new military awards and even releases on
long-term programs that weve already won," chief
financial officer Vincent Palazzolo said this week.
While so far there has been no
reduction in the "throughput in our shop," and none is expected
through the first half, there "could be an effect in the back
end of the year," depending on how long the slowdown persists,
"We dont know where
its going to go," he said about the impact of
sequestration, noting that throughput isnt expected to be
affected in part due to more non-defense work.
However, the companys
business, which had been growing at a "double-digit" pace for a
number of years through 2012, wont reach that rate this
year, Palazzolo said.
Last year, CPIs business
was about 70-percent defense, and 30-percent non-defense and
commercial, Palazzolo said, noting that this ratio will shift
to 65-35 in favor of military programs this year.
In addition to the Gulfstream
650, CPIs largest non-military program, the programs at
its largest customers include the Northrop-Grumman E-2 Hawkeye
surveillance aircraft and the Boeing A-10 attack aircraft, he