Spirit AeroSystems is considering another round of early retirements.
The Wichita-based supplier to Boeing and Airbus informed some of its 10,700 local employees by e-mail last week that they may be eligible for the voluntary retirement program, which is pending approval by the company’s board of directors.
That program could include a supplemental benefit of an amount of money equal to one year of an employee’s salary but capped at $70,000, as well as a possible $10,000 lump sum payout, the e-mail said.
Spirit said in an e-mailed statement to The Eagle on Monday that the program “affects only employees in certain jobs who have been employed with Spirit since day one of the company and did not retire from Boeing.”
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The bulk of those targeted workers are in Wichita, the company said, although some are at its plants outside Kansas, which include Tulsa and McAlester, Okla., and Kinston, N.C.
Spirit said it does not have a target number for early retirements, but it estimates about 1,000 workers would be eligible.
“The company is constantly reviewing its staffing needs and making workforce adjustments to meet customer demand and improve competitive position for the future, including measured hiring as well as some reductions,” Spirit said in the statement. “Utilizing voluntary programs is a strategy that Spirit has used in the past and has been well received by our employees.”
The company added it currently has no plan for layoffs.
B.J. Moore, Midwest director for the Society of Professional Engineering Employees in Aerospace, said Monday he was surprised at the timing of the notice, which was sent to employees on the afternoon before Thanksgiving.
Moore, whose union represents 2,700 technical and professional workers and engineers at Spirit in Wichita, said he doesn’t know what’s driving the company’s new effort to reduce its workforce.
“It was a surprise but yet they’ve been doing it for the last couple of years,” he said.
Last December, the company offered a voluntary retirement and voluntary layoff program but did not disclose how many employees in Wichita or its six other sites signed up for them. The company had about 11,000 employees in Wichita at the time.
Despite an overall strong backlog of orders for Boeing and Airbus airplanes, Spirit has had to adjust its production rates lower on a couple of models, including the Boeing 747. Boeing lowered the production rate in September from one jumbo jet a month to one every two months.
Boeing also plans to reduce the monthly production rate on its 777 from 8.3 a month to seven a month next year. The 777 has seen waning demand ahead of production of Boeing’s new 777X, the first delivery of which is expected in 2020.
Some analyst think there aren’t enough 777s on Boeing’s order book to sustain the seven-a-month rate as it transitions to full production of the 777X.
Spirit manufactures parts of both airplanes, including the forward fuselages, in Wichita.
Spirit president and CEO Tom Gentile said at a Morgan Stanley investor conference in September that a second 777 rate cut could be partially offset by the planned increase in 737 production next year – from 42 a month to 47 – but it would likely prompt Spirit to “accelerate some of our cost reduction initiatives.”