Tuesday, July 23, 2024

Spirit Aero to Cut Jobs After Boeing Slows Down 737 Output

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(Bloomberg) — Spirit AeroSystems Holdings Inc. plans to lay off about 450 workers at its main campus in Wichita, Kansas, as it grapples with mounting losses and a slowdown in shipments to Boeing Co.

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Lower deliveries of 737 Max airframes and other components “compels a reduction to our workforce,” Spirit spokesman Joe Buccino said in an emailed statement. The company plans to notify affected employees in the coming weeks, he said.

Spirit faces growing financial pressure and scrutiny from multiple federal investigations alongside Boeing, its former parent, following a nearly catastrophic accident involving an airborne 737 Max in January.

Read more: Boeing Supplier Spirit Aero Squeezed as 737 Output Drops

The aerostructures supplier said on May 7 that it had burned through $444 million in free cash during the first quarter due to plunging deliveries of 737 airframes to Boeing and mounting losses on contracts to supply Airbus SE’s A220 and A350 airliners.

Boeing in March confirmed it was in discussions to acquire Spirit, a move that would help stabilize its supply chain and give it more direct control over its aircraft production. Spirit’s shipments to Boeing plummeted after the planemaker stopped accepting 737 fuselages from the supplier with missing or incomplete components. Both companies expect that to turn around during the second half of 2024, as new quality measures take root.

Spirit shares rose 2.3% at 3:01 p.m. in New York while Boeing gained 3.1%. The plan to cut about 450 workers was reported earlier by local television outlet KSN TV.

(Updates with details of production changes at Boeing, Spirit from third paragraph)

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