Boeing Suppliers Tighten Payrolls As 737 Max Remains Grounded

Jan 16, 2020
Originally published on January 16, 2020 10:34 am

DAVID GREENE, HOST:

When Boeing's 737 Max aircraft was grounded almost a year ago, many predicted ripple effects in the economy, and the fallout has definitely spread to suppliers. Boeing's largest supplier is Spirit AeroSystems in Wichita, Kan., where about 70% of the plane is made. As Nadya Faulx reports from member station KMUW, nearly 3,000 workers are about to be laid off.

NADYA FAULX, BYLINE: Spirit AeroSystems was making the body of the 737 Max, along with a thrust reverser and parts of the wings, right up until last month, when Boeing put a halt on all deliveries. Now, narrow fuselages wrapped in bright orange tarps sit in storage in the center of Spirit's sprawling campus in south Wichita.

Not far from where the fuselages are parked, Spirit workers stream in both directions during shift change on a cold, foggy afternoon. It's their first day back since they learned the company will lay off 2,800 hourly and salaried employees. That's about all they were told.

SAVANNAH HONEA: Haven't heard anything.

QUENTIN CURRY: No new news.

HONEA: Nothing new.

CURRY: About as know as much as you guys know.

FAULX: Savannah Honea and Quentin Curry are leaving work for the day. They're both assembly mechanics at Spirit and crafted parts for the 737 Max.

CURRY: Yeah, it's nerve-wracking, but, you know, in the line of aircraft, you got to kind of deal with these sorts of things. And things happen. And, you know, you just take one day at a time.

FAULX: Curry's worked here for about six years. Honea's been with Spirit for about a year. She's worried she'll be among the employees targeted for layoffs next week.

HONEA: It's scary because you never know if you're going to walk in and if you're going to be the next one to get a pink slip.

FAULX: Spirit employs more than 13,000 people here in Wichita. The layoffs will account for about 20% of its workforce here. In a statement, Spirit calls the layoffs difficult but necessary while the 737 Max program is on hold. The company builds parts for other Boeing planes, like for the 787, 767 and 747, but the Max represents about half of Spirit's annual revenue.

And it's not the only supplier here being affected. About 40 companies in Kansas manufacture parts for the 737 Max.

(SOUNDBITE OF MACHINERY)

FAULX: Across town at Cox Machine, production has slowed on the aluminum parts needed for the Max. Owner Jason Cox says about a third of his work is tied to the plane.

JASON COX: It's a big component of our business, obviously, and everybody else in this region.

FAULX: To cut costs, the company just went to a four-day workweek. And last week, some of Cox Machine's 300-plus employees were laid off. Cox says his company has been trying to adjust since last March, when the Max was first grounded.

COX: To be honest, I never thought it'd last this long. I really didn't. So, even with the alternate scenarios we were planning, I just - I didn't think that it would stretch for nearly as long as it has.

FAULX: One small silver lining - the 737 Max's grounding hasn't impacted the entire aviation industry, and there are still plenty of aerospace jobs in the area. The FAA has no timeline for clearing the Max for commercial flights again. This week, American Airlines said it won't fly the 737 Max again until June at the very earliest. And Malaysia Airlines announced it's suspending its orders of the jet.

Back at Spirit, Savannah Honea is taking the situation in stride.

HONEA: Anything can change. Numbers might change. Might not have to lay off so many people or might have to extend to more or - I don't know. Just be optimistic. I want to be optimistic.

FAULX: She says if she is laid off, she'll sign up for unemployment and look for another job, with the hope of returning to Spirit when production starts again. For NPR News, I'm Nadya Faulx in Wichita. Transcript provided by NPR, Copyright NPR.