Economics expert on how Boeing strike could impact Spirit sale

Boeing faces more problems with Wednesday’s announcement that the company will furlough thousands of employees to save money as union workers in the Pacific Northwest go on strike.

While it’s hard to know how the strike and furloughs at Boeing will affect suppliers like Spirit AeroSystems in Wichita since we don’t know how long the strike will last, one thing that is for sure is that with Boeing’s purchase of Spirit, the situation is not good for either company.

“Their fortunes, their fortunes are really joined at the hip,” said Newman University Associate Professor of Management Dr. Larry Straub.

Last Friday, about 33,000 Boeing union workers went on strike, leading to the furlough announcement this week.

“Boeing has obviously been struggling, taking a lot of body blows on a lot of fronts in the last couple years, couple, three years. And so they’re trying to do everything to do everything they can to stay as strong as they can while they fight another battle,” Straub said.

While the furloughs present issues for Boeing, the strike is having a bigger impact on suppliers like Spirit AeroSystems, halting the production of several Boeing airplanes.

“Then the short line suppliers and the small suppliers behind there, they have to start looking at possible furloughs, pay cuts, things on their end of it, possibly even to save cash,” Straub said.

But is Spirit at a serious risk of experiencing layoffs?

“It all depends on how long this goes,” Straub said. “I think if they could get this thing somehow settled out within three weeks to a month tops, I think probably the system could absorb that shock.”

But the last Boeing strike lasted nearly two months.

“That would not be a good thing for this company right now. My opinion (is) they need to get this figured out quicker than that,” Straub said.

Representatives with Boeing and Spirit met on Tuesday for the first time since the strike began. They’re meeting again on Wednesday. This is evidence that the two parties aren’t yet close to reaching a deal. Last week, 96% of union workers declined the contract presented to them.

Source: (KWCH)

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