In this Dec. 11, 2019 photo, a Boeing 737 Max taxis for a test flight at Renton Municipal Airport in Renton. (AP Photo/Ted S. Warren, File)

In this Dec. 11, 2019 photo, a Boeing 737 Max taxis for a test flight at Renton Municipal Airport in Renton. (AP Photo/Ted S. Warren, File)

Spirit lays off 2,800 in Wichita due to Boeing production cut

The company expects to conduct further layoffs “later this month” at two factories in Oklahoma.

By Aaron Gregg / The Washington Post

Citing “ongoing uncertainty” involving Boeing’s 737 Max jet, airplane parts supplier Spirit Aerosystems has sent layoff notices to roughly 2,800 employees at its plant in Wichita, Kansas.

About half of Spirit’s annual revenue comes from supplying parts for the Max, which has been grounded for months following two fatal crashes. In December, Boeing announced it would indefinitely halt production of the Max beginning in January.

Spirit builds the 737 Max’s entire fuselage as well as smaller components such as thrust reversers, engine pylons and wing components.

The company said in its release that Boeing has not told it how long the production suspension will last, or given it any information about what future production rates might look like. Boeing, in turn, is waiting for word from the Federal Aviation Administration for word on when the planes will be cleared to fly again.

“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,” Spirit said in a news release. “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 levels in 2019.”

The company expects to conduct further layoffs “later this month” at two factories in Oklahoma. There could be further layoffs after that, the company said in its announcement.

The Boeing 737 Max has been grounded since March after regulators concluded that equipment flaws played a role in a pair of deadly plane crashes that killed 346 people in Indonesia and Ethiopia. For more than a year, Boeing has been working on a set of fixes designed to make the plane safer. But the timeline for clearing them to fly again has continually been pushed back as more technical problems were discovered.

In December, the Chicago-based aerospace giant announced it would stop producing the 737 Max in January, roughly 10 months after global regulators grounded the planes. Boeing has described its production halt “the least disruptive decision to maintaining long-term production system and supply chain health,” and pledged to work with suppliers to lessen the impact when possible.

The decision quickly rippled through the global aviation industry. Southwest Airlines, the largest 737 Max customer, announced it would cancel approximately 300 flights a day through the busy holiday travel season. American Airlines is telling customers it expects the jet to be recertified by April 7. And United Airlines, another 737 Max customer, announced it would pull flights through June 4, the longest period of any airline.

The ban on deliveries has been costly for Boeing, leading it to a historically bad quarterly loss of $3.38 billion last year. Revenue fell $20 billion in the most recent quarter, a 21 percent drop from the previous year.

Talk to us

More in Herald Business Journal

Everett to consider allowing three more pot shops in city

After months of economic, planning and public safety review, the city council could vote next month.

Economic Alliance and Lynnwood offer new business grants

The grants are derived from the federal Coronavirus Assistance, Recovery and Economic Security (CARES) Act.

Paine Field gets $5M grant to remedy a CARES Act oversight

Shortchanged earlier, the Snohomish County airport is the recipient of a new federal grant.

Amazon’s buying spree of used planes goes against green pledge

Airlines are being spurred to hasten the retirement of their oldest, fuel-guzzling aircraft.

An update: We’re proud and humbled by our readers’ support

The Daily Herald investigative fund has grown, and now we’re working to expand environmental coverage.

Commentary: The 737 Max debacle won’t be the end of Boeing

The plane may actually be the bright spot in Boeing’s airliners business.

Panel blasts Boeing, FAA for ‘horrific culmination’ of failures

Investigators found that the company had a financial incentive to avoid more pilot training.

Marysville offers another round of CARES Act grants

Funds are available for those who need help paying for housing or business expenses amid COVID-19.

Port again wins millions in grant money for mill site revamp

The Port of Everett successfully reapplied for federal funding after losing $15.5 million last year.

‘Better with Boeing’ campaign aims to keep 787 assembly here

A new marketing effort hopes to persuade the company to keep Dreamliner work in Everett.

737 Max engineer didn’t know details of flight control system

The program’s leaders only assumed pilots would react differently to the triggering of the MCAS.

Everett company faces $230,000 fine for safety violations

State inspectors allege that Chilos Builders exposed workers to hazards at area construction sites.