Boeing strike pushes supplier Spirit AeroSystems to plan worker furloughs

Spirit AeroSystems will start furloughing workers this month in response to the continuing strike at Boeing, the aerostructure supplier’s biggest customer. 

Spirit will implement a 21-day furlough for about 700 workers supporting Boeing’s 777 and 767 jetliner programs beginning Oct. 28, Spirit spokesperson Joe Buccino said. If the strike at Boeing, soon to enter its sixth week, continues past November, Spirit will need to extend unpaid leave and begin layoffs, he said.

“Nov. 25 is the tripwire,” said Buccino. “If we get to Nov. 25 and the strike is still going on, then we’ll have to implement layoffs and bigger numbers of furloughs.”

In a message to employees Friday, Spirit Chief Financial Officer Irene Esteves announced a series of other cost-saving measures. These include a hiring freeze, a prohibition on overtime work, a reduction of 15% in nonlabor spending, and the elimination of all spending on travel, consultants and advertising.

The measures at Spirit highlight how the crisis at Boeing is rippling across the wider aerospace industry. Boeing is in the process of buying back Spirit after an ill-fated separation almost two decades ago. The supplier relies heavily on work from the U.S. plane-maker and has come under mounting financial pressure in recent years. 

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Spirit has exhausted its storage space for what it builds for the large 767 and 777 aircraft, Buccino said. Boeing is conducting only minimal output amid the strike of 33,000 workers that has idled its main Seattle-area factories that assemble the widebody jets.

Production of the cash-cow 737 aircraft has also ground to a halt. Although Spirit has built up a large backlog of completed 737 MAX fuselages in Wichita, Kan., Buccino said that the 737 mechanics are busy doing final verification checks on those before they can be sent to Renton, and so won’t be immediately affected by the furloughs.

“We’re using this time to catch up,” Buccino said.

Talks between Boeing and union leaders broke down more than a week ago and haven’t officially resumed. Boeing’s latest offer included a 30% wage increase, while union officials are additionally pushing to reinstate a defined pension plan, something Boeing has said it won’t consider. 

Spirit also makes parts for Boeing rival Airbus, which also plans to buy back some assets as part of the reintegration into Boeing.

Reuters reported on the planned measures at Spirit earlier.

Additional reporting by Seattle Times reporter Dominic Gates.