Spirit AeroSystems, a major supplier of airplane parts to Boeing, is hitting the brakes on its operations. The company announced yesterday that it will limit overtime and hiring for certain positions due to a decrease in Boeing's 737 production output. This news comes after Boeing itself faced challenges ramping up production of the 737 Max, a model that was grounded for nearly two years following two fatal accidents.
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While the Max has since been cleared to fly again, airlines have been cautious in bringing the planes back into service. This has led to a decrease in demand for parts manufactured by Spirit AeroSystems, which specializes in fuselage sections for the 737. Limiting overtime signifies a shift from Spirit AeroSystems' previous approach. In the past, the company has relied on overtime to meet Boeing's production demands.
However, the current slowdown suggests that Boeing no longer requires the same level of urgency from its suppliers. The hiring freeze applies to specific roles, likely those directly tied to 737 Max production. This could impact positions on the assembly line or in engineering departments focused on the 737 program. Spirit AeroSystems has not yet disclosed the exact number of positions affected by the hiring slowdown. The impact of these measures on Spirit AeroSystems' workforce is yet to be seen.
Employees who previously worked overtime hours may see a reduction in their paychecks. Additionally, the hiring freeze could dampen the company's growth plans in the short term. This development highlights the ripple effect that can occur within the aerospace supply chain. When a major plane manufacturer like Boeing experiences production slowdowns, its parts suppliers, like Spirit AeroSystems, are also likely to feel the pinch. Analysts are watching closely to see how long this slowdown will last. The health of the 737 program is crucial for both Boeing and Spirit AeroSystems, and a sustained drop in production could have significant financial consequences for both companies.