LDN - Business

Boeing faces a new FAA review as a key supplier plans temporary furloughs due to labor strike

[October 19, 2024] By DAVID KOENIG

Boeing's biggest supplier of aircraft components said Friday that it will temporarily furlough 700 workers later this month, warning that it would have to resort to layoffs if a strike by Boeing machinists lasts beyond November.

Spirit AeroSystems said Friday that starting Oct. 28, employees who build parts of Boeing 767s and 777s will be off the job for three weeks. A strike by about 33,000 Boeing workers in the Pacific Northwest that started Sept. 13 halted production of those planes and Boeing 737 Max jets.

Boeing is in the process of buying Spirit for $4.7 billion to reduce outsourcing and to have more control over its supply chain.

The furloughs at a key supplier were announced as Boeing faced a new review of its compliance with Federal Aviation Administration safety regulations.

The FAA said it will examine key safety processes at Boeing over the next three months to make sure that they “result in timely, accurate safety-related information for FAA use.”

An FAA spokesperson said the review was not triggered by any particular event but rather is part of the FAA’s oversight of safety culture at the huge aircraft maker. The FAA increased its scrutiny of the company after a panel blew off a Boeing Max during an Alaska Airlines flight in January.

A Boeing spokesperson said Friday, “We continue to cooperate fully and transparently with the FAA. We support all actions that strengthen safety in aviation.”

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The inspector general of the Transportation Department said last week that weaknesses in FAA oversight are limiting its ability to find and fix problems at Boeing.

The auditor said FAA has failed to ensure that Boeing and its suppliers make parts that meet engineering and design requirements and to investigate claims that Boeing puts improper pressure on employees who are authorized to conduct safety inspections. The FAA has closed only 14 of 34 reports of undue pressure, with the others remaining open for more than a year on average, according to the report.

Meanwhile, there are no outward signs the strike at Boeing might end soon. The company said last week that it plans to lay off about 17,000 people in the coming months as the aerospace giant tries to deal with revenue losses from its idled assembly lines.

Acting Labor Secretary Julie Su met this week with representatives of Boeing and the International Association of Machinists and Aerospace Workers, an indication of the Biden administration’s concern about the strike's impact on the economy.

Spirit AeroSystems spokesperson Joe Buccino said the temporary furloughs are part of a cost-cutting plan that includes a hiring freeze and restrictions on overtime work and travel. He said Spirit, based in Wichita, Kansas, has built up a large inventory of 767s and 777s that can’t be shipped to Boeing because of the strike, and Spirit doesn’t have room to store any more.

“If the strike continues beyond November, financial pressures will require us to implement layoffs and additional furloughs,” Buccino said.

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