Spirit To Resume 737 Max Production, But At A Reduced Pace

Jan 30, 2020
Originally published on January 31, 2020 3:32 am

Spirit AeroSystems said Thursday it has reached an agreement with Boeing to resume production of the 737 Max, but at reduced levels.

Both Boeing and Spirit halted production of the plane last month; the jet was grounded globally last March following two fatal crashes in 2018 and 2019. Spirit makes about 70 percent of the 737 Max, and the program accounts for about half of the company’s annual revenue.

At its peak, Spirit was making about 600 shipsets per year for Boeing consisting of the 737’s fuselage, pylon, wing leading edges, thrust reverser and engine nacelles.

Spirit is expected to make only 216 shipsets in 2020. And it does not expect to return to peak production until late 2022.

Before the 737 Max was grounded, Spirit was making 52 shipsets a month. It continued full production for several months after the plane was grounded, stacking up extra shipsets at the company’s plant in south Wichita.

How the agreement will affect employment at Spirit is unknown. The company laid off 2,800 employees earlier this month.

The shutdown also has affected smaller aviation supply businesses in Wichita, leading to layoffs there as well.

Thursday’s announcement assumes the 737 Max will be cleared by federal regulators to return to service by this summer. Boeing CEO David Calhoun reiterated this week that he thinks the plane will meet that timeline.

Boeing reported this week that the 737 Max problems have cost the company $18.6 billion due to production delays, lost deliveries and compensation to airlines that have canceled tens of thousands of Max flights.

Spirit also announced Thursday that Chief Financial Officer Jose Garcia has resigned after the company found it did not comply with its established accounting processes. Spirit said it began a review of its accounting process compliance in December.

John Gilson, the company’s vice president, controller and principal accounting officer, also resigned.

Spirit said Mark Suchinski is the company's new senior vice president and chief financial officer. He has been with the company since 2006.

Tom Shine is the director of news and public affairs. Follow him on Twitter @thomaspshine. To contact KMUW News or to send in a news tip, reach us at news@kmuw.org.

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