Problems for Boeing and its troubled 737 Max aircraft are beginning to ripple outward with a major supplier announcing that it will lay off more than 20% of its workforce in Kansas, where it is based
WICHITA, Kan. -- Problems for Boeing and its troubled 737 Max aircraft, which appear to be growing deeper, have begun to ripple outward with a major supplier announcing Friday that it will lay off more than 20% of its workforce in Kansas, where it is based.
The announcement of 2,800 layoffs at a major employer in Wichita, the state's biggest city, come one day after documents became public showing that Boeing employees raised doubts about the safety of the 737 Max, apparently tried to hide problems from federal regulators, and ridiculed those responsible for designing and overseeing the jetliner.
The layoffs threaten to damage a state economy that's been solid for months, with low unemployment, and better-than-anticipated state tax collections. Democratic Gov. Laura Kelly and the Republican-controlled Legislature have been able to boost spending on public schools and services, and the news comes three days before lawmakers open their annual session.
Spirit AeroSystems is the largest employer in Wichita, which bills itself as the "Air Capital of the World" due to a heavy concentration of aerospace manufacturers. More than 40 aerospace companies, mostly clustered in south-central Kansas, provide parts and services for the production of the 737 Max.
The governor's administration had been considering the use of the state's fund for unemployment benefits to pay part of the salaries of Spirit workers, so that they could remain in their jobs.
Employees will be paid for a 60-day notice period. Affected employees will leave the company beginning Jan. 22.
Spirit produced about 70% of the 737 Max, including the fuselage. Contracts with Boeing for the Max represents more than half of Spirit's annual income.
"The difficult decision announced today is a necessary step given the uncertainty related to both the timing for resuming 737 production and the overall production levels that can be expected following the production suspension," Spirit AeroSystems CEO Tom Gentile said in a prepared statement.
Just days ago, Spirit broached the subject of voluntarily buyouts with employees. The company suspended production of fuselages and other parts for the Max on Jan. 1, after Boeing ordered the Wichita company to suspend shipments.
Spirit plans to implement smaller workforce reductions this month for its plants in Tulsa and McAlester, Oklahoma.
The company said it has taken steps to lessen the impact by transferring some 737 Max employees to other programs and facilitate job fairs to help laid-off employees.
Dozens of smaller aerospace companies are also beginning to shed jobs as well.
On Thursday, U.S. Sen. Jerry Moran toured Cox Machine to hear about the impacts on the Wichita company.
Moran said he's troubled that the former Boeing CEO seemed to be downplaying the significance of the problem. The Kansas Republican said he contacted President Donald Trump to let him know that "everything is not OK” in his home state or elsewhere due to the continued grounding of the 737 Max.
John Hanna in Topeka, Kansas, contributed to this report.