Spirit announces voluntary retirement, layoff programs

Spirit AeroSystems on Monday announced to employees it was offering a voluntary retirement and a voluntary layoff program.

The company said in an e-mail to The Eagle that the programs are being offered to “eligible executive, management, and salaried employees, including SPEEA (Society of Professional Engineering Employees in Aerospace) represented positions, in Wichita and Oklahoma.”

A Spirit memo obtained by The Eagle said employees eligible for voluntary retirement must be 55 or older and have a minimum of 10 years service with the company by March 1, 2016.

Spirit said in the memo that employees for its voluntary layoff program must have a minimum of five years of service by March 1, 2016, and formally express interest.

The memo doesn’t provide further details on either program, and Spirit officials declined to provide additional information such as incentives for participating in either program.

The programs are not being offered to employees represented by the Machinists union, a Spirit official and Machinists District 70 president Frank Molina said.

The company has about 11,000 employees in Wichita.

In its last financial quarter, ended Sept. 30 and reported on Oct. 27, Spirit reported 6 percent lower revenue but an 87 percent gain in profit, compared with the same period in 2014. It also reported a $46 billion backlog of work.

The retirement and layoff programs also follow a massive recruitment effort by Spirit in July to hire more workers. That effort included a job fair put on by the company, in which it was seeking to hire up to 500 people, most as assembly mechanics.

And the company said it is still hiring as it prepares for production rate increases on the Boeing 737 and 787. Spirit expects to increase its production rate on the 737 — of which it manufactures the fuselage and other components — from 42 to 47 airplanes a month, followed by a jump to 52 by 2018.

It also is preparing for a rate increase on the 787 — of which it builds the composite forward fuselage and other parts — from 10 a month to 12 a month by spring 2016.

“We are still hiring critical skills to meet the need of the business,” Spirit said in its e-mail Monday to The Eagle.

Spirit said in the e-mail that it does not have “target numbers” for participation in either program. The company also wouldn’t say whether there would be involuntary layoffs if it wasn’t satisfied with results of the voluntary layoff program.

“We will not speculate on workforce activity,” it said in the e-mail.

Bob Brewer, SPEEA’s Midwest director, said he was surprised by Monday’s announcement, adding that in earlier conversations with company officials he said he was told there were no plans to offer an early retirement program this year.

“To me it’s kind of dangerous path to go down because these programs will only affect the people with the most knowledge and skills” while Spirit prepares to increase production on key airplanes, he said. “Trying to backfill with new people … seems like a challenge to me.”

Aviation industry analyst Richard Aboulafia said he was surprised by the announcement, too.

“It’s a bit of a baffler,” Aboulafia said.

By all indications, the work Spirit is doing and the companies it is doing it for are benefiting from rising demand for commercial airliners. In addition to the 737 and 787, Spirit manufactures major components for all Boeing airliners as well as some Airbus airliners.

“I just don’t think they’re exposed to any markets that are declining right now,” he said.

This story was originally published December 14, 2015 at 2:45 PM with the headline "Spirit announces voluntary retirement, layoff programs."