By Tom Shine – Kansas News Service
Spirit AeroSystems will furlough all of its hourly employees still working on the Boeing 737 Max program for 21 days.
The furloughs will begin Monday and will affect about 900 people, the company said in a news release Wednesday.
“This difficult decision was made to help safeguard the financial health and stability of the company,” the company said in a statement. “We acknowledge the hardship this will have on our employees, and we’re thankful for their commitment and understanding during this difficult time.”
The move came the same day that Reuters and Bloomberg News reported that Boeing plans a test flight of the 737 Max later this month. The plane has been grounded since March 2019 after two fatal crashes.
Reuters, citing two people briefed on the matter, says Boeing told airlines about the test flight and a fix to address safety concerns about the placement of wiring bundles.
Reuters has reported U.S. regulators do not plan to unground the plane until at least August.
Spirit said in a later news release that Boeing had to told it to pause production on four 737 Max shipsets and not to start production on 16 others. A shipset is the 737’s fuselage, pylon, wing leading edges, thrust reverser and engine nacelles that Spirit builds and then delivers to Boeing.
At its peak, Spirit was making 600 shipsets a year. This year, it was expected to make 125, but Spirit thinks Boeing may reduce that figure another 20%.
Wednesday’s announcement continues a string of bad news from Spirit in 2020. Traditionally one of the state’s largest private employers, Spirit has laid off more than 4,000 employees since the first of the year, about a third of its workforce.
Another 850 employees took early retirement, and its top executives took a 20% pay cut.
Spirit’s problems also affect area aviation companies that are suppliers to the company. Sedgwick County’s unemployment rate in April was 18.7%, the highest in the state.
The 737 Max is Spirit’s most important program, responsible for nearly half of the company’s revenues last year. But production on the plane fell nearly 90% in the quarter of 2020 after Boeing halted deliveries from Spirit on Jan. 1.
In addition to the problems caused by the 737 Max, the pandemic has nearly halted air travel. Domestic air travel in April was down 96%.