WICHITA, Kan. -- Layoffs at Spirit AeroSystems spread Thursday to the airplane parts-maker's plants in Oklahoma amid the widening fallout in its home state of Kansas caused by the halt in production of the troubled Boeing 737 Max.
Spirit filed notice with the state of Oklahoma warning that it planned to lay off about 130 employees at its plant in McAlester, about 100 miles southeast of Oklahoma City. A company spokeswoman, Keturah Austin, said there will also be layoffs at Spirit's facility in Tulsa that do not meet the legal requirements for a notice. Large companies are required to notify a state 60 days in advance when they plan to lay off at least 50 workers.
The layoffs follow Spirit's Jan. 10 announcement that it was laying off 2,800 workers in Wichita, where the company is based. Austin said in an email that Spirit is laying off the workers because of uncertainty about when production might resume for the 737 Max, which was grounded last March after crashes in Indonesia and Ethiopia killed 346 people.
The grounding of the plane has affected other companies, as well, with global logistics company Schenker Inc. notifying the state of Kansas that it planned to lay off 255 employees at its office in Wichita, which is near Spirit's Wichita facility, the Wichita Eagle reported.
Schenker has logistics and supply chain management employees embedded at Spirit's Wichita facility, and its layoffs are also related to the Boeing 737 Max production halt, said Amanda Duncan of the area Workforce Alliance, which is working with Schenker to provide laid-off employees with resources before they lose their jobs.
"DB Schenker is taking this action to adjust to order demand by our client," the company said in a news release. "We are committed to working through this transition and supporting our employees in a manner consistent with our core values."
Schenker says on its website that it employs more than 68,000 people at 2,000 locations worldwide. It bills itself as the world's leading global logistics provider supporting industry and trade through land transport, worldwide air and ocean freight, contract logistics and supply chain management.
Spirit AeroSystems is the largest employer in Wichita, which bills itself as the "Air Capital of the World" due to a heavy concentration of aerospace manufacturers. More than 40 aerospace companies, most of them in and around Wichita, provide parts and services for the production of the 737 Max.
Spirit produced about 70% of the 737 Max, including the fuselage and other major components. Contracts with Boeing for the Max account for more than half of Spirit's annual income. Spirit halted production of fuselages and other parts for the plane on Jan. 1, after Boeing told Spirit to suspend shipments.
Boeing Co.'s recent announcements about the 737 Max came as unpleasant surprises to the grounded jetliner's biggest operator: Southwest Airlines Co.
Gary Kelly, Southwest's chief executive officer, said he was caught off guard early this month when Boeing reversed course and recommended flight-simulator training before pilots fly the Max. Kelly got another jolt this week when Boeing said the plane's return will probably slip to midyear.
"We ought to be able to get it done earlier than that," Kelly said in an interview Thursday. "If you go back a month or month and a half, we thought we'd be ungrounded here in January. Now all of a sudden, in the space of 30 to 60 days, we've slipped six months? Why? What's changed? As far as I can tell, nothing has changed."
Kelly's comments about Southwest's sole aircraft supplier reflect mounting airline-industry frustration with the grounding, which began in March after two Max crashes killed 346 people. The flying ban has stymied growth plans at Southwest, which, according to Kelly, has missed out on serving as many as 7 million customers.
He said some Max issues that have emerged recently shouldn't necessarily hold up the process of certifying the plane, since they are unrelated to the flight control software that played a key role in the crashes.
Boeing didn't immediately comment. The plane maker's new CEO, Dave Calhoun, said Wednesday that the decision to push back expectations for the Max's return was "a reality-based prognosis." The delay was due primarily to the recognition that Max pilots would need simulator training and not because of any new glitch, he said.
Information for this article was contributed by staff members of The Associated Press and by Mary Schlangenstein of Bloomberg News.
Business on 01/24/2020