Spirit AeroSystems has announced that it will lay off up to 450 employees in the coming weeks due to a slowdown in Boeing aircraft deliveries. The aviation company cited the reduced delivery rates of Boeing planes as the primary reason for the job cuts. Additionally, there are reports that Spirit AeroSystems is in negotiations to be acquired by Boeing.
Reasons and Details of Layoffs
Spirit AeroSystems, based in Wichita, Kansas, will reduce its workforce by 400 to 450 employees out of its approximately 12,600 employees. The company stated its commitment to implementing this transition as compassionately as possible. The decision is a response to the declining delivery rates of commercial airplanes, which have significantly impacted the company’s operations.
Relationship with Boeing and Delivery Issues
Spirit AeroSystems manufactures fuselages for Boeing’s bestselling 737 Max aircraft. However, the deliveries of these aircraft have slowed down due to a door panel explosion and the subsequent safety crisis at Boeing. Last week, Spirit AeroSystems reported that its first-quarter Boeing deliveries were down 31% compared to the same period in 2023, with overall deliveries falling by 11.3%. The company also reported a loss of $616.7 million in the first three months of the year.
Financial Struggles and Acquisition Talks
Spirit AeroSystems has faced financial difficulties in recent years and has not been profitable since 2019. The company is currently in talks to be acquired by Boeing, from which it was spun off in 2005. Last year, approximately 70% of Spirit AeroSystems’ revenue came from Boeing, though it also manufactures parts for Boeing’s competitor Airbus. Boeing CEO Dave Calhoun mentioned in an interview with CNBC in April 2024 that it is highly likely the companies will reach an agreement by the second quarter.
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