Boeing’s woes hit supplier with 2,800 laid off in Kansas
WICHITA, Kan. — Problems for Boeing and its troubled 737 Max aircraft, which appear to be growing deeper, have begun to ripple outward, with a major supplier announcing that it will lay off more than 20% of its workforce in Kansas, where it is based.
The announcement last week of 2,800 layoffs at a major employer in Wichita, the state’s biggest city, came a day after documents became public showing that Boeing employees raised doubts about the safety of the 737 Max, apparently tried to hide problems from federal regulators, and ridiculed those responsible for designing and overseeing the jetliner.
The layoffs threaten to damage a state economy that has been solid for months, with low unemployment and better-thananticipated state tax collections under Democratic Gov. Laura Kelly and a Republican- controlled Legislature.
Spirit AeroSystems is the largest employer in Wichita, which bills itself as the “Air Capital of the World” due to a heavy concentration of aerospace manufacturers. More than 40 aerospace companies, most of them in and around Wichita, provide parts and services for the production of the 737 Max.
The governor’s administration had been considering the use of the state’s fund for unemployment benefits to pay part of the salaries of Spirit workers so they could remain in their jobs.
Spirit produced about 70% of the 737 Max, including the fuselage. Contracts with Boeing for the Max represents more than half of Spirit’s annual income.
“The difficult decision ... is a necessary step given the uncertainty related to both the timing for resuming 737 production and the overall production levels that can be expected following the production suspension,” Spirit AeroSystems CEO Tom Gentile said in a statement.
Employees will be paid for a 60-day notice period. Affected employees will leave the company beginning Jan. 22.
Earlier this month, Spirit broached the subject of voluntary buyouts with employees. The company suspended production of fuselages and other parts for the Max on Jan. 1, after Boeing ordered Spirit to suspend shipments.
Spirit plans to implement smaller workforce reductions this month for its plants in Tulsa and McAlester, Oklahoma.
Cornell Beard, president of the local branch of the International Association of Machinists and Aerospace workers, said the union was meeting with the company to find ways to lessen the effect of the situation as much as possible.
“It’s an extremely difficult time for the workers at Spirit AeroSystems who have dedicated their lives to making this company a leader in aerospace. Machinists members and their families in this community have some tough decisions in front of them,” Beard said.
The company said it has taken steps to lessen the effect by transferring some 737 Max employees to other programs and facilitate job fairs to help laidoff employees.
Dozens of smaller aerospace companies are also beginning to shed jobs.
The loss of the 2,800 Spirit jobs is expected to have an effect on about 5,800 jobs in the economy, he said, noting that other aerospace manufacturers in the supply chain have been announcing layoffs.
“While these furloughs will affect a large part of the aerospace workforce in Wichita, I know the community is prepared to assist in every way possible,” Republican Sen. Pat Roberts said in a statement. “Wichita is the Air Capital of the World, and I am committed to making sure that does not change.”
Rep. Ron Estes, whose congressional district includes Wichita, said he will continue to work with the Federal Aviation Administration “to ensure grounded aircraft causing these furloughs can safely return to the skies without any unnecessary delays.”