Spirit AeroSystems, the largest aerostructures provider to Airbus, Boeing and other aircraft makers, will lay off around 1,450 more workers at its Wichita headquarters campus as it struggles to match cuts to its business from its OEM customers.
“Our actions follow reduced demand from our customers, who have lowered production rates as demand for new airplanes declines due to the impact of COVID-19,” Spirit CEO and President Tom Gentile said late May 1.
According to Spirit, 700 other workers will be transferred from their current assignments to a special project to manufacture medical devices for the fight against COVID-19—indicating that potentially more workers would have been let go were it not for the new work. Spirit laid off around 3,200 workers in Kansas and Oklahoma during the first quarter after Boeing halted production of the 737 MAX in January.
Boeing was responsible for around 79% of Spirit’s revenue last year, while Airbus accounted for 16%. The MAX alone made up about 53% of pre-pandemic annual revenue. In April, both OEMs announced their large commercial aircraft monthly production rates would drop 30-40% due to the novel coronavirus and the near collapse of air travel worldwide.
Spirit said the new round of layoffs will begin May 15. Later this month, “smaller” cuts will occur at Spirit’s other U.S. sites that perform commercial aircraft work. Global sites are reviewing workforce requirements and will announce their plans in the coming weeks, according to the company. Defense-related work will not be affected.
“While we are faced with difficult decisions during this unprecedented time in our industry, we remain focused on maintaining operations to support our customers, including the critical work we do on national security programs,” Gentile said. “I remain confident in the future of the aviation industry and believe in our ability as a company to weather this pandemic and emerge stronger.”
Spirit is slated to release first-quarter earnings results—before the true effect of COVID-19 occurred—on May 6. Observers also will be listening for news about planned acquisitions Spirit formally still expects to close this year. Spirit signed deals for Bombardier’s commercial aerostructures assets and the Asco aircraft parts maker, but financial analysts have deemed both deals to be vulnerable to cancellation after Boeing walked away from Embraer’s commercial assets April 25.
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