WICHITA- Spirit AeroSystems initiates 21-day furloughs for 700 employees working on Boeing 767 and 777 fuselage programs amid machinists strike at Boeing.
The company announced this workforce reduction on October 18, responding to Boeing’s production halt.
Spirit Aerosystems Furloughs 700
Storage capacity constraints drive this decision, as Spirit AeroSystems reaches maximum inventory levels for 767 and 777 fuselages. CEO Pat Shanahan confirms the furloughs result from facility space limitations rather than financial pressures.
Boeing’s ongoing five-week machinist strike disrupts production across multiple aircraft programs, including the 737, 767, and 777 models. The strike forces Boeing to suspend supplier deliveries, directly affecting Spirit AeroSystems’ operations.
The accumulation of completed fuselages at Spirit AeroSystems facilities creates logistical challenges, necessitating temporary workforce reduction. This situation demonstrates the interconnected impact of labor disputes within the aerospace manufacturing supply chain.
Spirit AeroSystems maintains its production capability while managing inventory constraints, highlighting the complex relationship between aircraft manufacturers and their suppliers.
CFO Irene Esteves shared the following measures due to lower revenue:
- Hiring freeze, including no backfills
- Overtime is eliminated
- A reduction of 15% in non-labor spending
- Travel is eliminated
- All advertising & marketing expenditures are eliminated, including air shows, trade shows, and special events
- Consultant spending is eliminated
- Working Capital will be reduced through strict inventory management
- Capital expenditures will be scaled back
The CFO even wrote in his message to employees that, “Any exceptions must be pre-approved in writing by Me (CFO) and CEO.
Boeing Strike Will Lead to Permanent Job Cuts
Spirit AeroSystems warns of potential permanent layoffs and additional furloughs if Boeing’s strike extends beyond November. The company implements immediate cost-reduction measures, including a hiring freeze and overtime restrictions.
Boeing’s labor dispute continues without resolution, leading to significant operational changes. The aircraft manufacturer announced 17,000 worker layoffs, cessation of 767 freighter production, and delays in 777-9 delivery schedules on October 11.
Spirit AeroSystems confronts multiple operational challenges in 2024. The January Alaska Airlines door-plug incident traced to Spirit’s assembly line errors, triggered Boeing’s interest in reacquiring the supplier. Boeing announced an $8.3 billion acquisition agreement in July, excluding Spirit’s Airbus-related operations.
Bell’s recent termination of Spirit’s involvement in the Future Long-Range Assault Aircraft program impacts Spirit’s military sector prospects. This US Army program represents potential multi-billion dollar contracts over upcoming decades.
The Boeing-Spirit acquisition proceeds toward a mid-2025 completion, marking Spirit’s return to Boeing ownership after its 2005 separation.
Boeing Strike Latest Update
Boeing initiates a $35 billion funding strategy through investor offerings and bank loans amid prolonged worker strikes. The company plans to raise $25 billion through stock and debt offerings, securing an additional $10 billion in bank borrowing arrangements.
The International Association of Machinists and Aerospace Workers organizes a Seattle rally, representing over 30,000 Boeing employees. Boeing withdraws its negotiation offer, which proposed a 30% wage increase over four years, leading to collapsed talks.
Boeing advances with workforce reduction plans, targeting 17,000 layoffs. Initial redundancy notifications will commence in mid-November, indicating significant operational restructuring.
The company frames these financial measures as strategic liquidity management steps during the labor dispute. The funding initiative emerges as Boeing navigates worker demands, production disruptions, and operational challenges.
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