Airplane fuselages intended for Boeing’s 737 Max production facility are awaiting shipment on rail sidings at their primary supplier, Spirit AeroSystems Holdings Inc., located in Wichita, Kansas, as of December 17, 2019, according to Nick Oxford of Reuters.
Boeing’s supplier, Spirit AeroSystems, will temporarily furlough approximately 700 workers due to a machinists’ strike at Boeing, which has reached its sixth week, as reported by a spokesperson for the supplier on Friday. Over 32,000 Boeing workers initiated the strike on September 13 after decisively rejecting a provisional labor agreement, exacerbating the financial challenges for the aerospace company. This presents a significant challenge for CEO Kelly Ortberg, who assumed his role just over two months ago.
The furloughs represent about 5% of Spirit’s U.S. workforce, based on their most recent annual filing. These furloughs will specifically impact employees at Spirit’s major facilities in Wichita, Kansas. While Boeing and its machinists’ union remain in deadlock, Spirit is contemplating further reductions. Spirit’s spokesperson, Joe Buccino, stated on Friday that if the strike persists past November, the company may need to enforce layoffs and additional furloughs.
As Kelly Ortberg faces investors during his first earnings call scheduled for next Wednesday, he has announced several significant cost-cutting measures in response to escalating company losses. These measures include reducing the workforce by 10%, equating to about 17,000 employees. Boeing is also set to cease commercial production of the 767 after fulfilling current orders by 2027 and has delayed the debut of its long-awaited 777X wide-body jet until 2026.
Boeing is concurrently attempting to raise debt or equity to enhance its liquidity. The approximately 700 Spirit workers affected by the 21-day furlough are primarily involved in the 777 and 767 programs for Boeing, where Spirit has amassed a substantial inventory, according to Buccino. Workers assigned to Boeing’s bestselling 737 Max are not impacted by the furloughs. Nevertheless, the strike has stalled operations for all three programs.
Boeing had agreed to acquire Spirit this past summer, though both companies do not anticipate the completion of this deal until mid-2025. This recent update on Spirit’s furloughs was initially reported by Reuters.
