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Spirit AeroSystems, Boeing 737 MAX parts supplier, announced about upcoming workforce reductions due to 737 MAX production halt, uncertainty over its timing and the expected levels of production after it resumes.
In a notice under the Worker Adjustment and Retraining Notification Act, the company said that the first round of lay-offs will affect approximately 2,800 workers at its Wichita, Kansas facility.
Spirit highly depends on 737 MAX program as “MAX represents more than 50 per cent of its annual revenue”. Thus, by decreasing the number of staff, Spirit will be able “to begin aligning its cost structure to the production suspension”. According to Spirit, Boeing has not informed the supplier on how long the production will be suspended.
Therefore, the supplier securing Boeing with almost 70 per cent of 737 MAX aircraft structure, including the entire fuselage, thrust reversers, engine pylons and wing components, reveals that it expects lower production rates even after production of the MAX planes begins again.
As for now, Spirit has over 100 MAX shipsets in storage, whereas Boeing, itself, has several hundred MAX planes already built but also in storage and yet not delivered to customers.
The affected workers from the Wichita facility will start leaving the company beginning 22 January, 2020. Nevertheless, Spirit Kansas facility is not the only one to suffer from the staff cuts.
Additionally, the company plans reductions at its plants in Tulsa and McAlester, Oklahoma, which work on the 737 MAX parts as well. Some more cost-cutting measures could be taken in the future, when Spirit and Boeing agree on final production rates.