The ongoing strike at Boeing is greatly affecting its suppliers, especially Spirit AeroSystems Holdings Inc. The company announced it will furlough 700 workers for 21 days because there is no more space to store parts for Boeing’s 767 and 777 planes. This comes as over 33,000 Boeing workers have been on strike for more than a month.
Spirit AeroSystems, based in Wichita, Kansas, manufactures fuselages for Boeing’s widebody jets. With production stopped due to the strike, the company cannot meet the storage needs for the fuselages it has already produced. Spirit’s CEO, Pat Shanahan, expressed concern for the employees affected by the furloughs, stating, “We understand the impact this has on our valued teammates and their families.”
Boeing and its suppliers have been facing problems for several years. The company has dealt with safety issues that grounded the 737 MAX aircraft and challenges from the COVID-19 pandemic. Spirit Aero has also faced financial difficulties, reporting a significant increase in losses in the second quarter of this year. The company has reduced production of 737 MAX fuselages from 31 to 21 per month, and further cuts may occur if the strike continues.
In response to the strike, Boeing plans to cut its workforce by 10%, affecting around 17,000 jobs. The company is also delaying production of its new 777X aircraft, pushing back the first delivery date to 2026. These steps are part of Boeing’s efforts to make its business more stable during tough times.
Boeing has used a debated method called “traveled work,” which involves moving unfinished planes along the production line to keep things going.However, with the strike, this approach has become less effective, adding to the company’s difficulties.
Credit ratings agency S&P has put Boeing on notice, indicating that a downgrade is possible if the strike continues for an extended period. This situation highlights how interconnected the aerospace industry is, as Boeing’s problems directly impact its suppliers like Spirit Aero.
Negotiations between Boeing and the striking workers are ongoing, but no solution has been reached yet. Union leaders have stated they are prepared to stay on strike until a fair deal is achieved.The effects of this strike will probably last for a while, affecting both Boeing and its suppliers as they deal with these difficult situations.
In summary, the strike at Boeing is leading to layoffs and production delays at Spirit AeroSystems, showing the challenges faced by the aerospace industry and the importance of resolving labor disputes quickly.