The ongoing strike by Boeing workers is casting a long shadow over the aerospace industry, forcing major suppliers like Spirit Aerosystems to make difficult decisions. Spirit Aerosystems, a key manufacturer of airplane components for Boeing, announced on Friday that it will be furloughing approximately 700 employees involved in the 767 and 777 programs, effective October 28th. This decision comes as the strike, led by the International Association of Machinists and Aerospace Workers, enters its third week.
The furloughs are part of a comprehensive cost-saving strategy implemented by Spirit to mitigate the financial impact of the strike. This strategy also includes a hiring freeze, limitations on travel, and restrictions on overtime. While Spirit has established a significant inventory buffer for the 767 and 777 programs, the company acknowledges that its storage capacity is limited. If the strike continues beyond November, the company warns that it will be forced to take further cost-saving measures, which could include layoffs and additional furloughs.
Spirit Aerosystems CEO Pat Shanahan expressed the company’s difficult position, stating that the furloughs were necessary due to the company’s limited storage capacity for the 767 and 777 units. He emphasized Spirit’s commitment to supporting the affected employees and their families during this challenging period.
Despite the challenges, Spirit remains dedicated to maintaining its high standards of quality and safety and continues to fulfill its obligations to customers, regulatory bodies, and the broader aerospace industry.
SPR stock, representing Spirit Aerosystems Holdings, Inc., has witnessed a significant rise of over 51% in the past year. Investors seeking exposure to this sector can consider the Gabelli Commercial Aerospace and Defense ETF (GCAD), which provides a diversified portfolio of aerospace and defense companies.
As the Boeing strike continues, Spirit Aerosystems faces a precarious situation. The company’s decision to implement furloughs highlights the significant impact of the strike on the entire aerospace ecosystem. The looming threat of layoffs and further furloughs underscores the urgency of reaching a resolution to the ongoing labor dispute.