Boeing's Potential Buyback of Spirit AeroSystems Raises Concerns Over Job Security and Supply Chain Integration
ICARO Media Group
Boeing is reportedly closing in on a deal to repurchase Spirit AeroSystems, a key supplier and former subsidiary. However, concerns have been raised regarding job security and the integration of Spirit AeroSystems' supply chain with Boeing's chief competitor, Airbus.
Spirit AeroSystems has made progress in separate discussions with Airbus to divide the divisions responsible for handling Airbus' work. This includes the SpiritAerosystems plant in Belfast, Ireland, which manufactures wings for the Airbus A220, and the plant in Prestwick, Scotland, which builds Airbus airframes and wings.
The trade union Unite, representing the majority of SpiritAerosystems' workforce throughout the UK, has expressed concerns about Boeing's buyback. They are seeking assurances from Airbus that they will acquire the parts of the business falling into its supply chain, and are adamant about preserving the manufacturing operations in Belfast and Prestwick without any job losses.
Unite's general secretary, Sharon Graham, emphasized the need to protect workers' livelihoods and urged for cast iron guarantees for their futures. Unite estimates that approximately 7,000 jobs in Northern Ireland rely on Spirit AeroSystems' activities in the region, with around 3,600 employees at the Belfast plant alone. Similarly, there are approximately 1,000 workers at the Prestwick plant.
The union highlighted their concerns over any potential transfer of production lines or sites in the Airbus supply chain to Boeing or a third-party, as it could threaten jobs. They argue that breaking up these divisions could undermine economies of scale and pose a long-term threat to all operations.
Boeing initiated negotiations to bring Spirit AeroSystems back under its umbrella earlier this year to address quality issues and stabilize the essential supply chain. This decision came after an incident in January where a door plug on an Alaska Airlines 737 MAX 9 flight blew out. The preliminary investigation by the National Transportation Safety Board (NTSB) concluded that the blowout may have been caused by four missing plugs, which were removed during an undocumented repair conducted by a Spirit AeroSystems worker at the Boeing plant.
Boeing is expected to acquire Spirit AeroSystems' plants in Wichita, Kansas, and Tulsa, Oklahoma, aiming to restore the operational structure that existed before Boeing divested the division in 2005. However, severing Spirit's ties with other aerospace companies is proving to be a complex undertaking. Over the past two decades, Spirit AeroSystems has become a crucial supplier to various commercial and defense competitors of Boeing, including its primary rival, Airbus.
The potential deal has faced opposition from Airbus, which has concerns about granting Boeing access to its intellectual property and engineering knowledge. Reuters reports that a deal over Spirit AeroSystems' Airbus-related assets is likely before Airbus' mid-year earnings announcement in July. However, The AirCurrent suggests that an announcement could be made as early as Monday, indicating that Unite's push for answers regarding Spirit AeroSystems' other work in the UK could impact the timing of the deal.
Both Boeing and Airbus have made progress in identifying the Spirit AeroSystems programs that each will reclaim, but the fate of the remaining programs for third parties remains unclear.
As negotiations continue, the future of Spirit AeroSystems' workforce and the integration of its supply chain with Boeing and Airbus are key concerns. Unite's efforts to ensure job security and safeguard the aerospace manufacturing base in Northern Ireland and Scotland will likely play a crucial role in shaping the outcome of the potential buyback deal.