Spirit Aerosystems to lay off 700 workers as Boeing machinist strike continues

Boeing supplier Spirit Aerosystem About 700 workers will be laid off due to a strike by machinists in the plane maker's sixth week, a spokesman for the supplier said Friday.

After more than 32,000 Boeing workers rejected a tentative labor deal with Boeing on Sept. 13, deepening the planemaker's financial pressure and handing a new challenge to CEO Kelly Ortberg, who took the reins just two months ago.

Temporary furloughs account for about 5% of Spirit's U.S. workforce, according to a recent annual filing.

The temporary furloughs will affect workers at Spirit's largest facility in Wichita, Kansas, and about 5% of Spirit's U.S. workforce, according to its latest annual filing. Meanwhile, Boeing and its machinists' union remain at an impasse, and Spirit is considering deeper cuts.

“If the strike continues beyond November, we will have to implement layoffs and additional furloughs,” Spirit spokesman Joe Bucchino told CNBC on Friday.

Ortberg, who faces investors in his first earnings call next Wednesday, last week announced a series of drastic cost-cutting measures, including cutting 10%, or about 17,000 jobs, as the company's losses widened. Boeing is also ending commercial production of the 767 when orders are filled in 2027 and has said its long-delayed 777X wide-body jet won't debut until 2026, pushing it back another year.

Boeing is in the process of raising debt or equity to increase liquidity.

About 700 Spirit workers affected by the 21-day furlough are employed in the 777 and 767 programs for Boeing, for which Spirit has built up “significant inventory,” Buccino said. Spirit employees of Boeing's bestselling 737 Max are not affected, he added. However, three programs are suspended due to the strike.

Boeing agreed to acquire Spirit this summer, but the companies don't expect the deal to close until mid-2025. Reuters previously reported on Spirit's latest holiday.