The goal here is to assess all of our options that we have at this point in time. We’ve got some good plans in place we’re thinking through. We’ve been successful as we’ve gone to the markets in the past. And I think that’s — as Pat talked about, his big goal of working with Airbus, one of my big goals is getting through the refinancing, getting us behind us so we can focus on the business in 2024. And so there’s a sense of urgency there. It’s a near-term priority. And we’re going to be working through that, as I had previously stated, to make sure that we get the refinancing done before the debt becomes short term.
Operator: Our next question comes from George Shapiro from Shapiro Research. Please go ahead.
George Shapiro: Good morning. Welcome, Pat. It’s been a while, but good to see you back in there.
Patrick Shanahan: Yes. Thank you. Good to be here. Good morning, George.
George Shapiro: And Mark, if I look at this quarter’s free cash flow, I take out the $100 million that you’re getting from Boeing. And I don’t — I’m not sure whether you got another advance for Airbus. But if you did, I mean, you’re still — next year’s free cash ought to be a lot better than just looking at this year’s fourth — this year’s implied fourth quarter, which was like $140 million, take out the $100 million from Boeing, so at $40 million. And I don’t think there was an Airbus payment there, you can correct me. But why wouldn’t next year at least be as good as the annualized rate for this year’s fourth quarter?
Mark Suchinski: Good question, George. I think as I addressed with David, as it relates to free cash flow, again, we’ll stick with the fact that it’s going to be positive next year. We’ll provide you more specifics around that when we come back and chat with you in the first week of February when we disclose our results. We don’t want to get ahead of things. Pat’s got a lot of work to do here, and we’re all here supporting him. We’ll pull together a good plan, and we’ll provide you guys an update in February.
George Shapiro: Okay. Then one quick one for you, Mark. The higher than expected excess costs, can you give some color with that and kind of what the thinking might be when we get to the fourth quarter?
Mark Suchinski: Sure, George. I would just say this, the third quarter was highly disrupted. When you think about our production, the number of units, our position in the factory starting the quarter, not gearing back the production line back up until around, call it, July 10 because of the IAM work stoppage and then the — or aft bulkhead issue. So I would say, for the most part, it’s the IAM strike, it was a quality issue and then just some of our own performance in the factory that ultimately added to the excess costs. And so what I would say is it’s a little bit of an anomaly because of that. And as we move into 2024, I would expect us to continue to see that those excess costs go down as we go up in rate and absorb more of the fixed cost overhead here. So again, I think we’ll continue to see things improve in the fourth quarter and then get better in ’24 as compared to ’23.
Operator: Our next question is from Noah Poponak from Goldman Sachs. Please go ahead.
Noah Poponak: Hey, Good morning, everybody. Pat, is it at least in the scenario analysis that you stay in the CEO seat long term rather than it being an interim solution?
Patrick Shanahan: Well, I’ll tell you, Noah. My commitment to Adrian, my wife and the Board was that I would do this for a year, stand up the operations so that we could put a strong replacement in place, and that remains the commitment, and no change at this time.
Noah Poponak: Okay. Appreciate that. And then just as a follow-up on the aft pressure bulkhead challenge on the MAX. I heard you that you’re now shipping conforming, clean, new off the line. I guess, what about the inventory rework? And just overall, what’s the time frame in which that is behind you completely?
Patrick Shanahan: I don’t have a time frame specifically right now in the work that we’ve been doing. If we had this call another week, I could probably give you a precise answer. The analysis continues to improve. And so I can’t really tell you what the final work scope is there, but it’s trending towards sooner rather than later.
Operator: Our next question comes from Robert Stallard from Vertical Research. Please go ahead.
Robert Stallard: Thanks so much. Pat, this is one for you, actually. On the Airbus negotiations, I was wondering if you could give us some idea of how this differs versus the discussions you’ve been having with Boeing? And in conjunction with Airbus, the A220 program didn’t take a charge this quarter. So I was wondering if you could give us an update on how that’s going.
Patrick Shanahan: Maybe Mark can talk about the charge, and I can talk about the negotiations. Do you want to take that first?
Mark Suchinski: Sure. Rob, you’re right. No forward loss charge in the A220 program. It was a pretty good quarter. I think the team is doing well. We’re meeting our delivery commitments to our customer. And so a pretty quiet quarter on the A220 side.
Patrick Shanahan: Yes, maybe just a comment on the differences or similarities between the Boeing and the Airbus negotiations. I’d say they’re very similar. I mean, the nature — this is really kind of concentrated on the A220. I mean, at the end of the day, it’s really about the A220. And like my earlier comment about the maturity of the production system and expectations of performance were not aligned. And until we can get that alignment, it makes producing at the higher rates more difficult. And I think that we will come to a reasonable outcome because it’s important for — it’s important for Airbus. It’s important for Spirit. It’s important for the airplane. There is strong demand for that airplane. And we’re committed to Airbus, and I think they’re committed to us, and it’s just something here in the short term. But I’m encouraged, based on the Boeing agreement, that we’ll get there with Airbus.
