As the Boeing Company (NYSE: BA) strike drags on, Spirit Aerosystems Holdings, Inc. (NYSE: SPR) faces tough choices ahead, including the looming threat of layoffs and extended furloughs.
On Friday, Spirit Aerosystems announced employee furloughs in response to the ongoing strike by Boeing workers represented by the International Association of Machinists and Aerospace Workers, which began on September 13.
Effective October 28, Spirit will implement a 21-day furlough for approximately 700 employees involved in the 767 and 777 programs. These furloughs are part of a broader cost-saving strategy that includes a hiring freeze and restrictions on travel and overtime.
The company has established a considerable inventory buffer for the 767 and 777 programs but lacks the capacity for additional storage.
If the strike persists beyond November, financial pressures will necessitate further cost-saving measures, which may include layoffs and additional furloughs.
"This difficult step was necessary given our limited storage capacity for 767 and 777 units," said Pat Shanahan, CEO of Spirit AeroSystems. "We recognize the impact this has on our valued teammates and their families, and we are committed to supporting them through this period."
Despite these difficulties, Spirit is committed to upholding the highest quality and safety standards and will continue to fulfill its obligations to customers, regulators, and the aerospace industry.
According to Benzinga Pro, SPR stock has gained over 51% in the past year. Investors can gain exposure to the stock via Gabelli Commercial Aerospace and Defense ETF (NYSE: GCAD).
Price Action: SPR shares are trading lower by 0.65% to $32.00 at last check Friday.