Aerospace & Defense

Boeing 737 Max supplier Spirit Aerosystems to cut 2,800 jobs as workers feel pain of grounding

Key Points
  • Spirit Aerosystems makes fuselages for the beleaguered 737 Max.
  • The company plans to lay off 2,800 workers because it's not clear when the Max will go back in service.
  • Boeing's 737 Max has been grounded since March after two fatal crashes.
An employee drills holes for rivets in a frame inside a Boeing 737 fuselage during assembly at Spirit AeroSystems in Wichita, Kansas.
Daniel Acker | Bloomberg | Getty Images

A key Boeing 737 Max supplier said Friday that it is planning to cut about 2,800 jobs as the planes remain grounded far longer than expected and the financial impact ripples through the aerospace company's supply chain.

Wichita, Kansas-based Spirit Aerosystems, which produces fuselages for the beleaguered planes, said it made the decision due to uncertainty around the Max's return to service. The company's shares fell after its announcement, trading down 2.7%. Boeing was off nearly 1.5%.

The 737 Max accounts for half of Spirit's revenue. The planes have been grounded since mid-March after the second of two fatal crashes — one in Indonesia in 2018 and another in Ethiopia nearly five months later — killed all 346 people on board the flights. Regulators haven't said when they would allow the planes to fly again.

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"This is not the news I wanted to share, and I know it's not the news you wanted to hear," CEO Tom Gentile told employees on Friday. "But the continued grounding of the Max fleet and the suspension of production has created a challenging situation for us." In addition to fuselages, Spirit makes thrust reversers, engine pylons and wing parts.

Spirit, which issued what's known as a WARN notice that requires companies to give employees 60 days notice of mass layoffs, said more job cuts are possible, a sign of how Boeing's 737 Max crisis continues to hurt suppliers and the communities where they're based. The laid-off employees, while they will have to depart in the coming weeks, will be paid for the entire 60-day notice period, Spirit said.

Spirit said it would also make smaller job cuts at two plants in Oklahoma.

The job cuts come as Boeing is facing a deepening crisis over the jets, its bestselling aircraft.

The company released hundreds of explosive messages on Thursday night, which were shared with lawmakers investigating the plane, that showed Boeing employees boasting about bullying regulators and disparaging the 737 Max as a plane "designed by clowns who in turn are supervised by monkeys."

Boeing called the messages "completely unacceptable."