Shortage of skilled airplane workers slows aerospace recovery

LYNNWOOD — The tight labor market could get even tighter for scores of Boeing suppliers hoping to add new workers.

In the quest to hire, they face greater competition from the aerospace giant that butters their bread, The Boeing Co.

In January, Boeing said it expects to hire 10,000 production workers this year even as it plans to cut 2,000 white-collar jobs.

Finding skilled labor has been an ongoing challenge for many aerospace manufacturers as they ramp up production to meet demand. It was also one of the main topics at the annual Pacific Northwest Aerospace Alliance conference, held last week at the Lynnwood Convention Center.

The air travel and aerospace industry is recovering nicely from the COVID-19 pandemic but labor shortages, inflation and the uptick in interest rates could add drag to the recovery, industry analysts say.

Airlines are buying airplanes again, though demand for widebody jets such as the Boeing 787 and 777 series continues to lag.

Airplane manufacturers are stepping up production to fill a huge backlog. Boeing has 4,000 of its 737 jets on backlog, while rival Airbus’ order book includes 6,000 of its A320neo series airplanes on backlog.

Boeing’s plans to increase 737 Max output, not only in Renton but with the addition of a fourth 737 assembly line at the company’s Everett plant, bodes well for the company’s network of suppliers. It means more work for many smaller aerospace firms, including some 200 Snohomish County companies.

To meet the demand, Art Brass Aerospace Finishing, a Boeing supplier that finishes metal aerospace parts, is hiring, said Chris Nussbaum, the firm’s sales and marketing executive.

The company recently set up a third shop in Mukilteo, said Nussbaum, who attended the PNAA conference in Lynwood.

Hundreds of aerospace manufacturers, aviation representatives and tech firms heard from companies such as Arlington’s Eviation Aircraft and Airbus, as well as industry analysts and trade groups.

Boeing declined to attend for a second straight year. The aerospace giant cut ties with the nonprofit trade group last year without saying why. However, the move is widely believed to have been in response to a lawsuit filed by former PNAA executive Fiona McKay. The group, a promoter of the region’s aerospace sector, came under scrutiny after allegations of a toxic workplace surfaced.

In 2020, Boeing publicly committed to creating a culture of inclusion and equity. The PNAA has said it has a proven track record of commitment to diversity.

Filling open positions at Art Brass Aerospace, which also has shops in Seattle and Auburn, has been a struggle, Nussbaum said.

With Boeing hiring, it’s become a greater challenge for smaller aerospace companies, such as Art Brass, to attract new workers.

For one thing, the Boeing name carries enormous weight with recent graduates of aerospace or manufacturing programs. Other job-seekers are members of multi-generational Boeing families — mom, dad, grandpa worked there — and want to continue the tradition, Nussbaum said.

The dynamic in which Boeing and its suppliers compete for the same pool of workers isn’t new, Nussbaum said.

Instead it’s part of the longstanding cycle of rising and falling demand that defines the aerospace industry.

“Boeing is great, but it makes it tough to hire,” he said.

The hiring dilemma didn’t go unheard at this week’s aerospace conference.

A panel discussion by AJAC: Advanced Manufacturing Apprenticeships offered tips on hiring and retaining workers.

The nonprofit group helped tailor Everett-based Aviation Technical Service’s apprenticeship program, in its fifth year.

Studies show that if you can keep them on the job for four years, they’ll stay for six or 10 years.

An apprenticeship can be part of that, Demetria “Lynn” Strickland, AJAC’s executive director, told the gathering.

So, think about establishing a registered apprenticeship with AJAC, Strickland said.

Having trouble with younger workers who don’t always show up to work on time?

“It takes some time for those skills to be built in,” Strickland said. Apprenticeships can help. They not only teach technical skills, but interpersonal skills.

The latest clutch of workers care about the impact of their work and the larger contribution it makes, said Bri Durham, AJAC’s on-the-job trainer.

“The kids want to know what your company does and how cool it is. Explain the why and the big picture — even if they get on your nerves,” Durham said.

A company culture that answers those questions is a big selling point, she said.

Most importantly, it’s critical for smaller companies to offer job-seekers and employees specific information on how to climb the ladder, Durham said.

“Be specific about the steps they need to complete to get to the next level,” Durham said.

No new airplane

The conference featured a star-studded lineup of aviation analysts, including Kevin Michaels and Richard Aboulafia, managing directors at AeroDynamic Advisory, an Ann Arbor, Michigan, consulting firm, as well as Ron Epstein, senior aerospace equity analyst at Bank of America Merrill Lynch.

Again, this year their focus was Boeing, and more specifically, its decision to stall development of a new commercial passenger airplane until the next decade.

All three analysts puzzled over Boeing CEO David Calhoun’s recent announcement that the company would not introduce a new airplane model until mid-2030. Calhoun said a propulsion system that’s 20% to 30% more efficient than current models hasn’t yet been developed. Until then, no new plane.

It’s an about-face for Boeing.

In 2017, the planemaker floated the concept of a “middle-market airplane” that would fit somewhere between the largest 737 and the smallest 787. At that time, it was widely believed Boeing would move forward with a new jet. However, the Boeing 737 Max crisis and the COVID-19 pandemic, which crushed air travel, intervened.

Industry analysts say Calhoun’s decision is unwise and could erode the company’s market share.

In a panel discussion Wednesday, Aboulafia didn’t mince words when he urged Boeing’s top executives to consider a remedial course in corporate strategy.

“There must be a book at the Everett Public Library titled “’Management for Dummies’ they can check out, ” Aboulafia said.

“They need to flex their engineering muscle,” he said.

The market is ripe for a narrow-body airplane with 220 to 240 seats and a 5,700-mile range, basically a single-aisle 787, panelists said.

The airlines want a new airplane,” Epstein said, citing a recent airline survey.

“If you’re not developing new airplanes, you’re not going to be in the airplane business,” Epstein said.

“It’s a risk for Boeing to continue to wait,” said Ken Herbert, managing director of RBC Capital Markets.

Wait and Boeing risks ceding even greater market share to rival Airbus, which continues to rack up orders for the A320neo family of single-aisle aircraft, he said.

Although Boeing borrowed heavily during the pandemic, taking on substantial debt, money isn’t an issue, Herbert said.

Should the company decide to build a new airplane, “they will find the cash financing,” he said.

Still, any hope that Boeing might reverse engines and engineer a new plane has mostly vanished. “As long as the current leadership is in place, they won’t do anything new,” Aboulafia concluded.

Janice Podsada: 425-339-3097; jpodsada@heraldnet.com; Twitter: @JanicePods.