Boeing 737 Max parts supplier laying off 2,800 employees
By Stephen Gandel
One of the largest suppliers of parts to Boeing's troubled 737 Max is laying off at least 2,800 workers in the U.S. The supplier, Spirit AeroSystems, also said it may have to cut more workers if production of the grounded jet — suspended last month amid lingering safety questions — doesn't resume soon.
Boeing 737 Max jets in airline fleets around the world have been grounded since March, following the second crash of the airplane in less than six months. The two crashes killed 346 passengers and crew.
Wichita, Kansas-based Spirit AeroSystems announced the layoffs Friday, saying the job cuts will eliminate 20% of its U.S. workforce. All of the effected workers are at its main Wichita facility. The company said former workers would get 60 days of severance and the layoffs would start January 22.
"The difficult decision announced today is a necessary step given the uncertainty related to both the timing for resuming 737 Max production and the overall production levels that can be expected following the production suspension." Tom Gentile, Spirit AeroSystems president and CEO said in a statement.
Beyond the 2,800 job losses in Wichita, the company said it would be making smaller rounds of layoffs at two other facilities in the Oklahoma cities of Tulsa and McAlester.
Boeing is the largest manufacturing exporter in the U.S., with hundreds of suppliers and vendors depending on its health. And the 737 Max has been its most popular airplane launch. Last month, following Boeing's decision to suspend production, some economists worried that the shutdown could hurt an already slowing U.S. manufacturing sector.
The broader U.S. economy still appears to be growing, though. On Friday, the government reported that U.S. employers added 145,000 workers to their payrolls in December.
Spirit has long been thought to be the one big company besides Boeing that could suffer the most from the 737 Max's troubles. The company derives about half its annual sales from parts that go into the 737 Max.
Spirit's stock price fell nearly 2%, or about $1.30 per share, to $71.50 on the layoff news. The company stock peaked at $100 a share back in February.
First published on January 10, 2020 / 12:50 PM
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