Reduced Work Week Curbs Need For Furloughs For Now

Spirit AeroSystems, Inc. announced Monday the company is taking immediate action to reduce production volumes on certain Boeing products as a result of the International Association of Machinists (IAM) strike at the American planemaker.

As ANN reported, the IAM struck Boeing at 12:01 am Saturday morning, after last-minute mediated talks failed. The walkout came following a vote in which 87  percent of members who voted to reject Boeing's last contract offer, also voted to strike.

The strike effectively shuts down all production at Boeing, as the planemaker will not be able to assemble airplanes. That also means the company will lose out on approximately $100 million for each day the strike drags on, as the company will not be able to collect final payments on delivered planes... and, of course, it cuts Boeing's needs for parts from outsider suppliers.

Spirit, one of Boeing's largest components suppliers, says it will implement a revised production and delivery schedule utilizing a reduced work week for employees who support, manufacture and assemble the affected products.

"We are working closely with our customer and taking the necessary steps as we respond to an unfortunate situation," said President and Chief Executive Officer Jeff Turner.

Spirit's used to this routine. The company notes it successfully managed through a prior IAM strike at Boeing in September 2005 using a shortened work week, instead of stopping production and furloughing employees.

"Our experience shows this approach is a prudent solution for all stakeholders," Turner said. "Today, Spirit is a financially stronger and a more diversified company than we were in 2005. As such, we will continue our normal efforts on certain Boeing products, as well as products for new customers including Airbus, Cessna, Gulfstream, Rolls Royce, Hawker Beechcraft and Sikorsky."

Spirit's previous 2008 financial guidance, provided on July 31, 2008, is being withdrawn as a result of the labor strike at its largest customer. Spirit will update its 2008 financial guidance and provide 2009 financial guidance when practical, after the IAM strike at The Boeing Company has ended.

FMI: www.spirit.aero, www.boeing.com, www.goiam.org