(Bloomberg) — Hexcel Corp. shares fell the most in four years after the company hired a CEO who recently resigned as head of Spirit AeroSystems Holdings Inc., a rival supplier under scrutiny over manufacturing quality issues.
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Tom Gentile will take over as Hexcel's CEO on May 1 and will likely join the board soon after, the company said late Tuesday. Current CEO Nick Stanage will become CEO of Hexcel, a major supplier to Boeing, until his retirement at the end of the year.
Truist Securities analyst Michael Ciarmoli called the hiring “troubling” in a client note and said it was “one of the most bizarre moves we have seen” in the airline industry. Spirit “has a long history of quality problems, an inability to generate cash and an inability to drive margin expansion,” he said.
The appointment comes about six months after Nations suddenly departed from the Spirit. The embattled manufacturer and Boeing have been rocked by revelations of widespread production quality problems involving multiple aircraft models.
Read more: Boeing's crisis of confidence worsens with 787 now under scrutiny
Gentile's final years at Spirit “could become the real sticking point” for investors, said Northcoast Research analyst Chris Olin. Both Northcoast and Bank of America downgraded the stock following the CEO's announcement.
Hexcel shares fell as much as 14% on Wednesday in New York, the biggest intraday decline since March 2020.
(Stock trading updates, and other details added all the time)
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