Boeing Provider Spirit AeroSystems will furlough about 700 employees because the plane maker's machinists' strike enters its sixth week, a spokesman for the supplier said on Friday.
More than 32,000 Boeing employees walked off their jobs on September 13 after overwhelmingly rejecting a tentative collective bargaining agreement with Boeing, exacerbating the financial strain on the plane maker and CEO Kelly Ortberg, who took over just over two months ago faced a brand new challenge.
The temporary furloughs represent about 5% of Spirit's U.S. workforce, in accordance with its most up-to-date annual filing.
The temporary furloughs will impact employees at Spirit's largest plant in Wichita, Kansas, representing about 5% of Spirit's U.S. workforce, in accordance with its most up-to-date annual filing. Meanwhile, Boeing and its machinist union remain at an impasse, and Spirit is considering deeper cuts.
“If the strike continues beyond November, we will need to implement layoffs and additional furlough days,” Spirit spokesman Joe Buccino told CNBC on Friday.
Ortberg, who will face investors in his first conference call next Wednesday, announced last week a series of drastic measures geared toward cutting costs as the corporate's losses mount, including a ten% reduction within the workforce around 17,000 people. Boeing can also be halting business production of the 767 when orders are filled in 2027 and said its long-delayed 777X widebody jet won't launch until 2026, pushing it back one other 12 months.
Boeing is within the strategy of raising debt or equity to extend liquidity.
The roughly 700 Spirit employees affected by the 21-day furlough will likely be assigned to the 777 and 767 programs for Boeing, for which Spirit has built up “significant inventory,” Buccino said. Ghost employees on Boeing's best-selling 737 Max usually are not affected, he added. However, as a consequence of the strike, work on all three programs has stalled.
Boeing agreed to accumulate Spirit this summer, but the businesses don’t expect the deal to shut until mid-2025. Reuters previously reported on Spirit's recent furloughs.
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