Third Bridge global analyst Peter McNally discusses how the Boeing factory strike is impacting the business on ‘The Big Money Show.’
Spirit AeroSystems will tell workers on Friday that it will lay off 700 workers for 21 days as a month-long strike at the American aircraft company Boeing eats up cash and warehouse space for the supplier, a Reuters spokeswoman said.
The layoffs will affect Spirit Aero employees who work on Boeing’s 767 and 777 widebody jet programs. Production of those jets has been halted amid a strike by more than 33,000 US West Coast factory workers since September 13.
The furloughs follow Moya’s other cost-cutting efforts, including a hiring freeze and restrictions on travel and overtime.
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“These breaks are necessary as we have run out of space for the 767 and 777,” said spokesman Joe Buccino.
Boeing’s suppliers, which have invested heavily in materials and equipment to support the planemaker’s planned assembly program, have been laying off workers in recent weeks and halting investment because of the strike.
Symbols of Spirit AeroSystems Holdings Inc. on a Boeing 737 fuselage outside a Boeing Co. manufacturing facility. in Renton, Washington, US, Monday, Feb. 5, 2024. (Photographer: David Ryder/Bloomberg via Getty Images/Getty Images)
Wichita, Kansas-based Spirit Aero also warned it would have to lay off workers and announce additional layoffs if the strike continued last November, Buccino said.
Boeing declined to comment.
| A ticker | Security | Finally | Change | Change % |
|---|---|---|---|---|
| SPR | AIR SYSTEMS AeroSYSTEMS | 32.21 | +0.10 |
+0.31% |
| BA | This company BOEING CO. | 155.31 | +0.41 |
+0.26% |
Boeing and its supply chain have faced a series of problems over the past six years, including the safety of the 737 MAX after two fatal crashes, a global pandemic, and a quality crisis since a door plug blew out in January.
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Spirit Aero’s second quarter loss doubled. One industry source familiar with the matter said the company had scaled back production of 737 MAX fuselages from 31 per month to 21 per month in August, September and October, and may have to cut back further. Boeing has been checking regularly with Spirit Aero about their finances, the second source said.
Spirit has already fully drawn down a $350 million bridge loan that was established when Boeing agreed to acquire its former supplier, and is expected to request additional assistance from the plane maker, the source said.
The headquarters of Spirit AeroSystems Holdings Inc. seen in Wichita, Kansas, US December 17, 2019. (REUTERS Photos/Nick Oxford / Reuters)
Spirit declined to comment on its loan service and results.
BOEING TO CUT 10% OF WORKERS, STOPPING 767 PRODUCTION BETWEEN WORKERS
Since March, Boeing has been testing new fuselages at Spirit’s Kansas factory and testing has taken longer than expected, a third industry source said. The delay had delayed the delivery of 737 MAX fuselages from Spirit to Boeing’s Renton, Washington factory.
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The delays and strike have made it less likely that Boeing will meet its goal of producing 38 MAX planes per month by the end of 2024, up from 25 jets per month in July.
During the strike, Spirit Aero stepped up testing of 737 MAX fuselages at its factory so more will be ready when the shutdown ends, Buccino said.
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