Airframes destined for Boeing’s 737 Max production facility wait for shipment on the rail lines of top supplier Spirit AeroSystems Holdings Inc. in Wichita, Kan., on Dec. 17, 2019.
Nick Oxford | Reuters
boeing company supplier spirit aerospace systems inc. The aircraft maker will furlough about 700 workers as a strike by its mechanics enters its sixth week, a spokesman for the supplier said on Friday.
More than 32,000 Boeing employees overwhelmingly rejected a temporary labor agreement with Boeing Co. Ortberg brought new challenges.
Furloughed employees account for about 5% of Spirit’s U.S. workforce, according to Spirit’s latest annual report.
The furloughs will affect employees at Spirit’s largest plant in Wichita, Kan., which accounts for about 5% of Spirit’s U.S. workforce, according to its latest annual filing. Meanwhile, Boeing and its machinists’ union remain in a deadlock, while Spirit Airlines is considering further cuts.
“If the strike continues beyond November, we will have to implement layoffs and additional furloughs,” Spirit spokesman Joe Buccino told CNBC on Friday.
Ortberg, who will face investors on his first earnings call next Wednesday, last week announced a series of tough measures aimed at cutting costs as the company’s losses mount, including cutting 10% of its workforce, or about 17,000 jobs. Boeing will also end commercial production of the 767 when orders are filled in 2027 and said its long-delayed 777X wide-body jet won’t debut until 2026, pushing it back another year.
Boeing is raising debt or equity to increase liquidity.
Buccino said the roughly 700 Spirit employees affected by the 21-day furlough are assigned to Boeing’s 777 and 767 programs, for which Spirit has built “significant inventory.” He added that mental staff on Boeing’s best-selling 737 Max were not affected. However, work on all three projects has been stalled by strikes.
Boeing agreed to acquire Spirit this summer, but the companies don’t expect the deal to close until mid-2025. Reuters earlier reported Spirit’s recent furloughs.