Spirit AeroSystems to Furlough 700 Amid Boeing Strike
Spirit AeroSystems, a key supplier to Boeing, announced plans to furlough approximately 700 employees as the machinist strike at Boeing continues into its sixth week. This decision underscores the significant impact the strike is having on the aerospace supply chain. Spirit AeroSystems, which employs around 14,000 people in the U.S., will implement these temporary furloughs, accounting for about 5% of its workforce, primarily affecting staff at its major facilities in Wichita, Kansas.
The strike commenced on September 13, when more than 32,000 Boeing machinists walked off the job after rejecting a proposed labor agreement. This labor dispute has compounded financial challenges for Boeing, presenting new hurdles for CEO Kelly Ortberg, who took over leadership just over two months ago. The prolonged strike has not only disrupted Boeing’s production schedules but has also strained its relationships with vital suppliers like Spirit AeroSystems.
According to Spirit spokesperson Joe Buccino, if the strike persists beyond November, the company may be forced to implement additional layoffs and furloughs. The current furloughs specifically impact workers involved in the 777 and 767 aircraft programs, for which Spirit has accumulated significant inventory. Notably, employees working on Boeing’s popular 737 Max are not included in this round of furloughs, although work on all three aircraft models remains stalled due to the ongoing labor dispute.
Boeing is facing a myriad of challenges as it navigates this strike, including the need to enhance its financial position. In response to the rising losses, Ortberg announced a series of drastic measures aimed at reducing costs, which includes a substantial workforce reduction of about 10%, translating to approximately 17,000 jobs. Furthermore, Boeing is set to conclude production of the 767 commercial aircraft once existing orders are fulfilled in 2027 and has pushed the debut of its delayed 777X wide-body jet to 2026.
To bolster its liquidity amid these operational and financial challenges, Boeing is actively seeking to raise funds through debt or equity financing. This is a critical move as the company aims to stabilize its financial standing during a tumultuous period marked by labor strife and production delays.
The announcement of furloughs by Spirit AeroSystems adds another layer of complexity to the already challenging landscape for aerospace manufacturers. With production on key Boeing programs halted and uncertainty surrounding the resolution of the strike, the future remains uncertain for both companies. The ongoing negotiations between Boeing and the machinists’ union have reached a stalemate, further complicating efforts to return to normal operations.
Spirit AeroSystems had previously entered discussions for Boeing to acquire the company, with expectations for the deal to finalize by mid-2025. However, the current labor disruptions and operational challenges could impact the timeline and dynamics of this acquisition.
As the situation unfolds, stakeholders in the aerospace sector will be closely monitoring developments related to the strike and its repercussions on production, workforce stability, and overall industry health. The ripple effects of the ongoing labor dispute highlight the interconnected nature of the aerospace supply chain and the significant role that labor relations play in maintaining operational continuity.
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Sources: AirGuide Business airguide.info, bing.com, cnbc.com