Boeing supplier dives as investors review ‘nerve-wracking’ CEO pick

(Bloomberg) — Shares of Hexcel Corp. plummeted the most in four years after the company appointed a CEO who recently resigned as head of Spirit AeroSystems Holdings Inc., a rival supplier under scrutiny for production quality problems.

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Tom Gentile will take over as CEO of Hexcel on May 1 and is likely to join the board of directors shortly thereafter, the company said late Tuesday. Current CEO Nick Stanage will become executive chairman of Hexcel, a major supplier to Boeing Co., until his retirement at the end of the year.

Truist Securities analyst Michael Ciarmoli called the hire “unnerving” in a client note and said it is “one of the most curious moves we have seen” in the aerospace industry. Spirit “has a long history of quality problems, inability to generate cash and inability to grow margins,” he said.

The appointment comes about six months after Gentile abruptly parted ways with Spirit. The embattled manufacturer and Boeing have been shocked by revelations of widespread production quality problems across several aircraft models.

Read more: Boeing’s crisis of confidence deepens as the 787 comes under scrutiny

Northcoast Research analyst Chris Olin said Gentile’s final years at Spirit “could become the real point of contention” for investors. Northcoast and Bank of America each downgraded the stock following the CEO’s announcement.

Shares of Hexcel fell as much as 14% in New York on Wednesday, the biggest intraday drop since March 2020.

(Updates stock trading, adds other details throughout)

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