Spirit AeroSystems has issued a notice under the Worker Adjustment and Retraining Notification Act of layoffs affecting approximately 2,800 employees at its Wichita, Kansas facility. Spirit is taking this action because of the 737 MAX production suspension and ongoing uncertainty regarding the timing of when production will resume and the level of production when it does resume.
This decision allows Spirit to begin aligning its cost structure to the production suspension and, after such suspension, what Spirit expects will be production levels lower than Spirit’s 2019 levels.
Spirit is a significant supplier on the 737 MAX program, with its workshare accounting for 70% of the airplane’s structure. This includes the entire fuselage, thrust reversers, engine pylons and wing components. In addition, the MAX represents more than 50% of Spirit’s annual revenue.
Spirit has not received notice from its customer, Boeing, on how long the production suspension will last or what the production rate will be in the future. Spirit believes that, when production resumes, the levels will be lower than previously expected due, in part, to the customer’s need to consume over 100 MAX shipsets currently in storage at Spirit’s facilities. In addition, Boeing has several hundred MAX airplanes built but not yet delivered to its customers.
Spirit plans to implement smaller workforce reductions later this month for its plants in Tulsa and McAlester, Oklahoma, which also produce components for the MAX. Based on final production rates agreed with Boeing, Spirit may have to take additional workforce actions in the future.
