① Aircraft fuselage supplier Spirit AeroSystems announced on Thursday that it will lay off 400-450 employees at its plant in Wichita, Kansas; ② Spirit is an important supplier of Boeing 737, which is responsible for manufacturing the fuselage and installing door plugs. The “bursting hatch” accident that shocked the world in January of this year occurred.
Financial Services Association, May 17 (Editor, Xiaoxiang) -- US aircraft body supplier Spirit AeroSystems announced on Thursday that it will lay off 400-450 workers at its Wichita, Kansas plant as the company struggles to cope with the impact of the slowdown in production at its largest customer, Boeing.
Spirit, which spun off from Boeing 20 years ago, has recently been at the center of the whirlpool of 737 MAX airliner quality issues. Its Wichita factory previously had about 13,000 employees.
Spirit is an important supplier to the Boeing 737 and is responsible for manufacturing the fuselage and installing door plugs. On January 5, an Alaska Airlines Boeing 737 MAX9 passenger plane had an accident shortly after takeoff. A door stopper on the side of the cabin fell off in the air.
The US National Transportation Safety Board's preliminary report on the January Alaska Airlines flight hatch burst found that when the plane left the Boeing factory in October, it was missing the four bolts needed to fix the hatch. However, the reason Boeing removed the door stoppers and missing bolts was that when the plane arrived at the Boeing factory, there was a problem with five rivets. These rivets and hatch were all manufactured by Spirit. So even if Boeing is ultimately responsible for this issue, Spirit's quality issues may have played a role.
Earlier, it was reported that Boeing is trying to buy Spirit. Boeing also stated in a statement on March 1: “We believe that the restructuring of Boeing and Spirit's manufacturing operations will further enhance aviation safety, improve quality, and serve the interests of our customers, employees, and shareholders.”
However, this attempt has not progressed smoothly since then, because Spirit has so far failed to reach an agreement with Airbus to resolve the control issues relating to the production of Airbus aircraft parts at the Spirit plant.
Boeing reached a $425 million deal with Spirit AeroSystems last month to help the supplier address issues such as rising inventory levels and declining cash flow. Spirit reported serious losses in the first quarter of this year and said it could use the financial markets to get more cash.
Spirit CEO Pat Shanahan said last week that the company was losing money when producing parts for Airbus's A350 and A220 aircraft, and negotiations with Airbus to raise the price of parts were at an impasse.
About 70% of Spirit's revenue last year came from business completed for Boeing, up from 60% two years ago. Most of the company's other revenue comes from manufacturing parts for Boeing's European competitor Airbus.
Currently, Boeing has slowed production in the process of regulatory review and efforts to resolve quality issues. The company's goal is to keep parts flowing to avoid disrupting its huge supply chain, even if that means holding excess parts inventory. However, the company said it has recently begun to cut orders.
Boeing has said it hopes to reach its monthly production target of 38 737 aircraft later this year, but production so far falls far short of this figure.
Spirit said, “The recent slowdown in delivery of commercial projects has forced us to reduce the number of employees at our Wichita facility.”
Spirit has stated that the company can produce 42 737 airliner airframes per month.