Spirit AeroSystems To Lay Off 2,800 Workers Amid 737 Max Shutdown
Spirit AeroSystems announced Friday that it will lay off 2,800 employees at its plant in Wichita as the shutdown of the Boeing 737 Max program drags on.
The move comes just weeks after Boeing ordered Spirit to halt all deliveries of 737 Max components. Spirit produces about 70% of the jet at its facility in south Wichita, including the fuselage. The program accounts for half of the company's annual revenue.
"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," Spirit CEO Tom Gentile said in a statement.
The company says employees will receive compensation during the required 60-day notice period. Employees will begin leaving on Jan. 22.
Further workforce reductions are possible in the future, Spirit said in a news release.
Spirit earlier this week said it was seeking voluntary layoffs. The company employs about 13,000 people in Wichita, making it the city's largest private employer.
On Friday afternoon, Gov. Laura Kelly directed Labor Secretary Delía García to coordinate the state’s response to the layoffs. She wants Garcia to make sure all available state resources are accesible to affected workers and businesses.
Kelly said the state also will work with local and federal agencies as part of the response.
Spirit said it reduced the number of layoffs by moving some 737 Max employees to other programs. It said it plans to hold job fairs with other aerospace companies to help laid-off employees find work.
Spirit also announced smaller layoffs later this month at its two facilities in Oklahoma.
Cornell Beard, president of the local branch of the International Association of Machinists and Aerospace workers, said the union was meeting with the company to find ways to lessen the impact of the situation as much as possible.
“It’s an extremely difficult time for the workers at Spirit AeroSystems who have dedicated their lives to making this company a leader in aerospace," Beard said. "Machinists members and their families in this community have some tough decisions in front of them."
The problems at Spirit and Boeing also are affecting more than 40 aerospace companies in south-central Kansas that provide parts and services for the 737 Max. Jason Cox, president of Cox Machine, said his plant has gone to four-day work weeks and has begun furloughs as a way to cut costs. About one-third of the company's work is tied to the 737 Max program, he said.
The 737 Max was grounded last March following two fatal crashes overseas. The FAA has not indicated when the jet might be cleared to return to service.
U.S. Senator Jerry Moran, who toured a Spirit supplier in Wichita on Thursday, said he has talked with incoming Boeing CEO David Calhoun and the administrator of the Federal Aviation Authority "to encourage them to work together and do everything necessary to get the 737 MAX safely back in the air."
Moran said he spoke Friday with President Donald Trump and Vice President Mike Pence "regarding the impact the layoffs will have in Kansas and throughout the aviation and aerospace industry."
Gentile, Spirit’s CEO, said in the statement that when production levels of the 737 Max "increase sufficiently in the future, we look forward to recalling employees impacted by today’s announcement."
When that will be is uncertain. When Boeing resumes production, it is likely to be at a slower rate than before the plane was grounded, Spirit said in a news release.
Spirit said it has more than 100 737 Max structures in storage at its facilities. In addition, Boeing has several hundred 737 Max airplanes built but not yet delivered to its customers.
Associated Press contributed to this report.
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