Spirit says it will slowly restart production work on 737 Max
Weeks after Wichita’s largest employer announced that it would lay off about 2,800 workers because of uncertainty about the production of the Boeing 737 Max, Spirit AeroSystems said it would slowly restart production of components for the FAA-grounded plane.
On Thursday, the company announced that it reached an agreed-upon production rate with Boeing, though there is not yet a restart date for production. The agreement is based on “several assumptions” including “Boeing’s expected production rate and the successful return of the 737 Max to service.”
The jet has been grounded since March after two crashes killed 346 people in Indonesia and Ethiopia. Boeing has been working to get the jet back in the air, but the timeline has been pushed back multiple times as more technical problems have been discovered.
Boeing president and CEO David Calhoun said he expects the 737 Max to be permitted by regulators to return to service by mid-2020.
The FAA has not commented on when the 737 Max will return.
Spirit expects 2020 production to be about a third of what it was in 2019, according to an email sent to employees by Spirit CEO Tom Gentile.
“Spirit will restart production slowly, ramping up deliveries throughout the year to reach a total of 216 MAX shipsets delivered to Boeing in 2020,” Spirit said in the news release. “Spirit does not expect to achieve a production rate of 52 shipsets per month until late 2022. The parties are continuing to negotiate other terms.”
That represents a major setback in production for the company, which had been producing 52 a month for more than a year.
When asked if restarting production would change the number of layoffs, Spirit spokesperson Keturah Austin referred to original announcement about the 2,800 layoffs.
“There have not been changes to this,” Austin said in an email.
The 2,800 employees are more than a fifth of the 13,000 employees in the Wichita area, according to the Greater Wichita Area Partnership.
More than half of Spirit’s revenue comes from the production of 737 aircraft components.
Boeing on Wednesday announced its first full-year loss since 1997, according to The Wall Street Journal. The company reported a net loss of $636 million compared to a profit of $10.46 billion in 2018.
The 737 Max fallout has cost the company more than $19 billion so far, The Journal reported.
“We recognize we have a lot of work to do,” Calhoun said in a news release during Wednesday’s report. “We are focused on returning the 737 MAX to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public.”
Contributing: Chance Swaim, Amy Renee Leiker and Dion Lefler of The Eagle.
This story was originally published January 30, 2020 at 9:47 AM.