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Tag: Spirit Aerosystems Holdings Inc

  • Boeing machinists reject new labor contract, extending more than 5-week strike

    Boeing machinists reject new labor contract, extending more than 5-week strike

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    People hold signs during a strike rally for the International Association of Machinists and Aerospace Workers (IAM) at the Seattle Union Hall in Seattle, Washington, on October 15, 2024.

    Jason Redmond | AFP | Getty Images

    Boeing machinists voted against a new labor deal that included 35% wage increases over four years, their union said Wednesday, extending a more than five-week strike that has halted most of the company’s aircraft production, which is centered in the Seattle area.

    The contract’s rejection by 64% of the voters is another major setback for the company, which warned earlier Wednesday that it would continue to burn cash through 2025 and reported a $6 billion quarterly loss, its largest since 2020.

    The strike is costing the company about $1 billion a month, according to S&P Global Ratings.

    New CEO Kelly Ortberg had said reaching a deal with machinists was a priority in order to get the company back on track after years of safety and quality problems.

    “My focus is getting everybody looking forward, get them back to work, improve that relationship,” Ortberg told CNBC’s “Squawk on the Street” earlier in the day, when asked about the strike.

    Ortberg’s laid out his vision for Boeing’s future, which could includes slimming down the company to focus on core businesses. Earlier this month, he announced Boeing will cut 10% of its global workforce of 170,000 people.

    Boeing’s more than 32,000 machinists in the Puget Sound area, in Oregon and in other locations walked off the job on Sept. 13 after overwhelmingly voting down a previous tentative agreement that proposed raises of 25%. The International Association of Machinists and Aerospace Workers union had originally sought wage increases of 40%. It is the machinists’ first strike since 2008.

    The latest proposal, announced last Saturday, included 35% raises over four years, increased 401(k) contributions, a $7,000 bonus and other improvements.

    Workers had pushed for higher pay amid a surge in living costs in the Puget Sound area. Some machinists were upset about losing their pension plan in a previous contract that they signed in 2014, but the latest proposal didn’t offer a pension.

    Boeing agreed in the new contract to build its next aircraft in the Pacific Northwest, which had also been a sticking point with unionized workers after Boeing moved all of its 787 Dreamliner production to a non-union factory in South Carolina.

    “We have made tremendous gains in this agreement. However, we have not achieved enough to meet our members’ demands,” said Jon Holden, president of IAM District 751, at a news conference Wednesday night. He said the union will push to go back to the negotiating table.

    Boeing declined to comment on the voting results.

    The labor strife is the latest in a long list of problems at Boeing, which started the year when a door plug blew out midair from a packed Boeing 737 Max 9, its best-selling plane, reigniting regulator scrutiny of the company.

    The strike began as Boeing was working to ramp up production of the 737 and other aircraft.

    The extended stoppage is also a challenge for the aerospace supply chain, which is fragile coming out of the pandemic, as the company’s web of suppliers had to train new workers quickly.

    Spirit AeroSystems last week said it would temporarily furlough about 700 workers and that layoffs or other furloughs are possible if Boeing machinists’ strike continues.

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  • Boeing warns new defect on 787 Dreamliners will slow deliveries

    Boeing warns new defect on 787 Dreamliners will slow deliveries

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    An employee works on the tail of a Boeing Co. Dreamliner 787 plane on the production line at the company’s final assembly facility in North Charleston, South Carolina.

    Travis Dove | Bloomberg | Getty Images

    Boeing on Tuesday warned about a new defect on its 787 Dreamliner planes and that it will delay deliveries of the wide-body aircraft, the manufacturer’s latest production issue.

    “We are inspecting 787s in our inventory for a nonconforming condition related to a fitting on the horizontal stabilizer,” Boeing said in a statement. “Airplanes found to have a nonconforming condition will be reworked prior to ticket and delivery.”

    The issue Boeing detected relates to tiny spacing in the horizontal stabilizer. Boeing said it isn’t related to flight safety and that planes in service can continue operating. Near-term deliveries will be delayed by about two weeks, Boeing said.

    The problem is the latest in a spate of manufacturing issues on Boeing planes that have slowed if not paused deliveries of certain aircraft outright, just as airlines are clamoring for new planes to capitalize on the travel boom.

    Boeing had paused deliveries of the planes for several weeks earlier this year because of a separate problem on a fuselage component on certain 787s. The latest issue currently doesn’t affect Boeing’s full-year outlook for Dreamliner deliveries, the company said. Boeing has estimated that it would deliver between 70 and 80 of the planes this year.

    The company has also had to rework some of its bestselling 737 Max planes this year because of an issues with fittings in some planes’ aft fuselages, made by Spirit Aerosystems.

    Boeing shares fell sharply on the news but largely recovered, and were recently down less than 1% in afternoon trading.

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  • Boeing slips 6% after warning of reduced 737 Max production and deliveries due to parts issue

    Boeing slips 6% after warning of reduced 737 Max production and deliveries due to parts issue

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    Boeing 737 Max airplanes sit parked at the company’s production facility on November 18, 2020 in Renton, Washington.

    David Ryder | Getty Images

    Boeing on Thursday warned it will likely have to reduce deliveries of its 737 Max airplane in the near term because of a problem with a part made by supplier Spirit AeroSystems.

    Boeing said its supplier informed the company a “non-standard” manufacturing process was used on two fittings in aft fuselages. It said the issue affects certain 737 Max 8 planes, the company’s most popular model, with customers including American Airlines and Southwest Airlines. It also affects certain 737 Max 7, the 737 8200 and P-8 planes.

    Boeing said the problem was not an “immediate safety of flight issue and the in-service fleet can continue operating safely.”

    Boeing has notified the Federal Aviation Administration of the issue and is working to inspect and address the fuselages as needed, the company said. The FAA said Boeing notified it of the issue and also said there is no immediate safety issue.

    However, the issue will likely affect a significant number of undelivered 737 Max airplanes, both in production and in storage,” the manufacturer said in a statement.

    “We expect lower near-term 737 MAX deliveries while this required work is completed. We regret the impact that this issue will have on affected customers and are in contact with them concerning their delivery schedule,” Boeing said in a statement. “We will provide additional information in the days and weeks ahead as we better understand the delivery impacts.”

    The problem, the most recent in a string of production issues, hits Boeing as it scrambles to increase production and deliveries of its best-selling plane while customers await new jetliners to capitalize on a rebound in travel. 

    Shares of Boeing were down 6% in premarket trading Friday. Shares of Spirit AeroSystems were down roughly 14%.

    Spirit manufacturers some of the fuselages used in Boeing jets and said in a statement it notified Boeing of a “quality issue” with certain 737 models.

    “Spirit is working to develop an inspection and repair for the affected fuselages. We continue to coordinate closely with our customer to resolve this matter and minimize impacts while maintaining our focus on safety,” the company said.

    It’s the latest production problem for Boeing and its customers. Boeing earlier this year paused deliveries of its 787 Dreamliners for several weeks to address a data analysis flaw, and in 2021 and 2022 it struggled with other production flaws on the wide-body jets that halted deliveries for months.

    The company on Tuesday reported March deliveries of 64 planes, the highest tally since December, amid an industry-wide shortage of new jets.

    Airline executives have cited aircraft supply constraints as among the chief challenges in ramping up flying ahead of the peak travel season.

    “We’re aware of the issue and working with Boeing to understand how it may impact our MAX deliveries,” an American Airlines spokesman said in statement.

    Southwest said in a statement that it expects the issue to impact its delivery schedule of new Max planes and that it is discussing the details of that timeline for this year “and beyond.”

    United said it didn’t expect any “significant impact” to its capacity planes for this summer or the rest of 2023.

    — CNBC’s Leslie Josephs and Phil LeBeau contributed to this report.

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