Spirit AeroSystems will lay off 400 to 450 workers at its Wichita, Kansas, factory due to a production slowdown at its largest customer, Boeing.
The plant, which employs around 13,000 people, has been at the center of quality issues affecting Boeing’s 737 MAX jets.
These layoffs coincide with delays in Boeing’s efforts to acquire Spirit.
The acquisition has stalled because Spirit has yet to finalize a deal with Airbus concerning control over Spirit factories that produce parts for Airbus jets.
Boeing said acquiring Spirit is crucial for resolving its own quality issues.
Spirit’s Wichita factory produced the fuselage involved in the January Alaska Airlines door-plug blowout incident, and the company has struggled for years to reduce defects.
Boeing agreed last month to make $425 million in advance payments to Spirit to support its quality-improvement efforts.
However, Spirit reported significant losses in the first quarter of the year and indicated it might seek additional funds from financial markets.
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Spirit’s CEO, Pat Shanahan, recently said the company is losing money on parts for Airbus’s A350 and A220 jets.
He revealed it has reached an impasse with Airbus over securing higher prices for these parts.
Meanwhile, Boeing has reduced production amid regulatory scrutiny and efforts to address quality concerns.
Although Boeing aimed to maintain parts flow to avoid supply chain disruptions, it has begun to cut back orders.
Boeing plans to reach a production rate of 38 737s per month later this year but is currently producing below that target.
Spirit said: “The recent slowdown in the delivery rate on commercial programs compels a reduction to our workforce in Wichita.”
The company is staffed to build fuselages for 42 737s per month.
