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Boeing’s Spirit AeroSystems Considering Furloughs As Machinist Strike Continues
Spirit AeroSystems, a tier 1 supplier for Boeing that is in the process of merging with the aircraft manufacturer, has considered furloughs if the machinists strike at Boeing’s facilities in the Pacific Northwest and California continue.
No final decision
Joe Buccino, a spokesperson for Spirit AeroSystems, told Simple Flying that the company has been reviewing its contingency plans regarding furloughs.
“No decisions have been made at this time.”
Photo: JHVEPhoto | Shutterstock
The Financial Times (FT) first reported about the potential furloughs that could happen in three weeks if strikes at Boeing continue.
The International Association of Machinists and Aerospace Workers (IAM) District Lodge 751 and District W24 have been striking since their contract expired on September 13.
While the manufacturer and the unions’ negotiating committees had agreed upon a tentative agreement (TA), the unions’ members voted against it and approved a strike, which has been going on for two weeks now.
Boeing’s furloughs
However, Boeing reacted much quicker, and in an attempt to conserve cash, the aircraft manufacturer announced far-reaching cash-saving measures, including its own rolling furloughs.
The company’s other actions have also included a hiring freeze, stopping non-essential travel, and other non-manufacturing-related expenses.
In addition, Boeing was also planning to significantly reduce supplier expenditures, stopping issuing the majority of its purchase orders on the Boeing 737, 767, and 777 programs during the strike.
Photo: Spirit Aerosystems
Neither Boeing nor Spirit AeroSystems has yet quantified the financial impact of the strike. Spirit AeroSystems, which announced a $415 million net loss in Q2 on August 5, said that it would stop providing guidance and canceled its Q2 earnings call due to its pending merger with Boeing.
The two companies signed a definitive agreement in June and announced the deal to the public on July 1. Boeing made the move in order to improve the quality and safety of its products, including the 737 MAX, with the acquisition helping the manufacturer and the supplier align their production systems, including the safety and quality management systems, according to the now-former chief executive officer (CEO) of Boeing, David Calhoun.
At the time, Boeing stated that it should clear the required regulatory approvals and complete the transaction in mid-2025.
Negotiations continue
Nevertheless, Boeing, IAM, and the Federal Mediation and Conciliation Service (FMCS) will continue negotiating on the machinists’ contract on September 27. Talks, which were mediated by the FMCS, broke down on September 18.
However, Boeing directly presented its supposedly final offer to the two IAM lodges on September 23. The union and its members responded negatively to the offer, with the IAM District 751 saying that the direct contract offer was an attempt to bypass the negotiating committee and was disrespectful to the union’s members and the bargaining process.
Photo: VDB Photos | Shutterstock
While Boeing initially set the ratification deadline to September 27, IAM District 751 said that its members would not vote on that date. The company later extended the deadline, yet the move to put forth a non-negotiated contract did not pan out for Boeing, and the strike has continued.
On September 26, IAM District reiterated that it does not bargain through the press and the only way to get its members to get back to work was “through meaningful negotiations.”
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