financetom
Business
financetom
/
Business
/
Exclusive-Aerospace industry scrambles to deal with fallout from huge US factory fire
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Exclusive-Aerospace industry scrambles to deal with fallout from huge US factory fire
Feb 27, 2025 1:38 PM

(Reuters) - Boeing and other top aerospace firms are scouring their supply chains to determine their exposure to a major fire last week at a Philadelphia-area parts factory that has set off alarm bells across the industry, people familiar with the matter said.

The days-long fire at SPS Technologies' century-old factory could put pressure on the industry's already strapped supply chain.

GE Aerospace and others are now trying to figure out who can replace the factory's lost production and also identify who has spare parts, the people said. Both Boeing and France's Safran contacted suppliers asking about the potential effects, according to letters seen by Reuters.

The fire, which caused no fatalities, is the latest in a string of supply setbacks in aerospace. This stadium-sized facility was crucial to the production of key parts, and some analysts warned that its loss could further strain the industry's ability to boost output.

SPS products include titanium fasteners of the kind used to assemble carbon-fiber jets like the Boeing 787 and Airbus A350.

Some fasteners produced at the factory are also highly specialized and not easily sourced by other manufacturers, analysts and industry executives said.

Boeing and European rival Airbus were already facing supply snags as they try to boost airplane output. 

"There's only so much inventory of this out there, and that something's going to have to change really fast to avoid potential (problems) that could affect production rates," said AeroDynamic Advisory Managing Director Kevin Michaels.

In a letter sent to suppliers following the February 17 fire seen by Reuters, Boeing asked the companies whether they regularly used parts from the SPS factory, located in Jenkintown, and to explain the impact if SPS could not ship parts that were ordered.

A Boeing spokesperson said it is "working with suppliers to assess impacts and ... taking steps to manage any impacts." CEO Kelly Ortberg said last week in brief comments that he expected some disruption from the fire.

French engine and landing gear maker Safran also contacted suppliers to see if they purchase directly from SPS, according to letters seen by Reuters and two suppliers. 

"We are assessing the situation with our supply chain and seeking alternative sources," a Safran spokesperson said.    

Engine maker GE Aerospace, the world's largest aerospace firm, said it had sent teams to SPS and was looking at alternative manufacturing sites and backup suppliers.

"We are taking proactive steps to minimize disruption and to ensure continued delivery to our customers," a spokesperson said.

A third industry source said SPS is also a significant supplier to Europe's Airbus. 

"It is still early to confirm the extent of our exposure, however we expect the impact to be limited for our operations," an Airbus spokesperson said.

SUPPLY CONTEST

SPS is part of Berkshire Hathaway-owned Precision Castparts Corp (PCC), which was not immediately available for comment. SPS's website claims that "it's hard to find an aircraft" that does not contain some of its products.

The near 600,000-square-foot (5.6-hectare) facility specialized in high-strength nuts and bolts for engines, wings, fuselages and landing gear, according to the SPS website. The fire burned for several days before the flames were fully extinguished on February 22, leaving the plant gutted.

Planemakers have ample inventory of the parts they handle on a daily basis, but the production gap left by the fire sets the stage for a potential contest to secure supplies down the road. One senior supplier went so far as to predict "rationing" by distributors unless alternatives can be found.

Two executives at other fastener companies said they were being bombarded with requests in the wake of the fire, with one saying he had received dozens of queries in two days.

While most SPS parts are produced by multiple suppliers, some portions of these aircraft fasteners were higher value and complex parts only produced by SPS, according to one of the two fastener company executives who spoke on condition of anonymity.

It can take years for another factory to obtain the qualifications to produce them, he added. 

"These are not commodity fasteners," Michaels said, adding that there is "a lot of concern given the large number of sole-source fasteners and unique capabilities associated with this facility."

Canadian business jet maker Bombardier told Reuters that most of its parts can be sourced elsewhere.

The factory still had some wooden floors and structures, according to two sources who had visited the site before the blaze. 

Even then, a shipment meant to be sent to Boeing survived the fire but is currently inaccessible, Boeing's Ortberg told analysts on February 20.

"That's the kind of thing we're really working through on a real-time basis. It looks like pretty substantial damage."

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
TC Energy Nears Stake Sale In NGTL Pipeline To Indigenous Groups: Report
TC Energy Nears Stake Sale In NGTL Pipeline To Indigenous Groups: Report
Jul 24, 2024
TC Energy Corporation ( TRP ) shares are trading higher today. The company is reportedly close to selling a stake in its natural gas pipeline system to indigenous communities in Western Canada, with support from Alberta’s government. A provincial agency has conditionally approved a C$1 billion ($726 million) loan guarantee to help the indigenous consortium finance the purchase, which includes communities...
Gilead Sciences Says Lenacapavir 'Highly Effective' in HIV Prevention in Phase 3 Study
Gilead Sciences Says Lenacapavir 'Highly Effective' in HIV Prevention in Phase 3 Study
Jul 24, 2024
11:43 AM EDT, 07/24/2024 (MT Newswires) -- Gilead Sciences ( GILD ) said Wednesday that its twice-yearly lenacapavir injections were highly effective in preventing human immunodeficiency virus, or HIV, in cisgender women during a phase 3 trial. The new data provide details on the efficacy, safety and tolerability of lenacapavir injections. In June, interim analysis showed that lenacapavir demonstrated zero...
Update: Vizsla Silver Up 4.2% as it Releases a Preliminary Economic Assessment for the Panuco Project in Mexico
Update: Vizsla Silver Up 4.2% as it Releases a Preliminary Economic Assessment for the Panuco Project in Mexico
Jul 24, 2024
11:40 AM EDT, 07/24/2024 (MT Newswires) -- Vizsla Silver ( VZLA ) on Wednesday reported results from an independent preliminary economic assessment on its flagship Panuco silver-gold project in Mexico. The results showed an after-tax net present value of US$1.14 billion, an after-tax internal rate of return of 85.7% and an initial capital expenditure of US$224 million. Average annual production...
Kering posts 11% drop in Q2 sales, sees weak second half
Kering posts 11% drop in Q2 sales, sees weak second half
Jul 24, 2024
PARIS, July 24 (Reuters) - Kering reported a bigger-than-expected drop in second-quarter sales and forecast a weak second half, as the French luxury group struggles to revive its key label Gucci and worries grow about a prolonged downturn in high-end spending. Sales at the French luxury group which owns labels Gucci, Boucheron and Balenciaga, fell to 4.5 billion euros ($4.9...
Copyright 2023-2026 - www.financetom.com All Rights Reserved