(Bloomberg) — Hexcel Corp.’s shares tumbled the most in four years after the company appointed a CEO who recently resigned as the head of Spirit AeroSystems Holdings Inc., a rival supplier under scrutiny for manufacturing quality issues.
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Tom Gentile will take over as Hexcel’s chief executive officer on May 1 and likely join the board soon after, the company said late Tuesday. Current CEO Nick Stanage will become executive chairman of Hexcel, a key supplier to Boeing Co., until retiring at the end of the year.
Truist Securities analyst Michael Ciarmoli called the hiring “unnerving” in a client note and said it’s “one of the more curious moves we have seen” in the aerospace industry. Spirit “has a long history of quality problems, inability to generate cash and inability to drive margin expansion,” he said.
The appointment comes about six months after Gentile abruptly departed from Spirit. The embattled manufacturer and Boeing have been rocked by revelations of widespread problems with production quality spanning multiple aircraft models.
Read More: Boeing Crisis of Confidence Deepens With 787 Now 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 announcement.
Hexcel’s shares plunged as much as 14% Wednesday in New York, the biggest intraday slide since March 2020.
(Updates share trading, adds other details throughout)
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