The purchase of Spirit AeroSystems, Wichita’s largest employer, could cause issues down the road but current jobs seem safe for now.
Boeing wants a reunion with a corporate relative that’s drifted away.
Spirit AeroSystems, once a Boeing subsidiary, split off from the aircraft manufacturing behemoth nearly 20 years ago. But they’ve continued to partner and now find their fates and reputations intertwined over the safety of a flagship jetliner they built together.
Pressure to reexamine their relationship came to a head in January after a door plug blew out midflight on a Boeing 737 Max jetliner. The door plug was missing bolts, but a preliminary report didn’t determine whether Spirit or Boeing was responsible.
Boeing announced in early March it was in talks to purchase Spirit, the manufacturer responsible for assembling fuselages on the 737 Max. A Boeing spokesperson said that acquiring Spirit would help consolidate Boeing’s manufacturing process and create a safer product.
Amid a leadership reshuffle, Boeing faces its own reckoning. CEO Dave Calhoun announced he would leave at the end of the year, and other leaders at Boeing are also departing or taking smaller roles in the company.
Experts say the family drama won’t have any immediate effects in Wichita, but the region could feel a long-term fallout if Boeing buys Wichita’s largest employer.
“I don’t think people need to immediately worry about their jobs,” said Jeremy Hill, director at the Center for Economic Development and Business Research at Wichita State University. “But there are other long-term problems that may come in.”
Those problems include executive positions leaving the area and contracts being dropped with other major aerospace companies.
The aerospace industry is a huge sector of the Kansas economy. Hill said the state employs twice the average number of transportation manufacturing workers, a large portion of whom make aerospace equipment.
“The whole regional economy feels it when aerospace is doing good,” Hill said. “And we feel it when it’s doing poorly.”
Are jobs secure if there is a Boeing buyout?
John Rolfe, the president and CEO of the Wichita Chamber of Commerce, said job security is one of the things he will be watching first.
“We want to see them keep their presence here,” he said, “including their employees.”
After a weeklong strike last June, Spirit and its machinist union members agreed to a deal that increased pay and ended mandatory overtime. It was the first new contract for Spirit workers since 2010.
The International Association of Machinists and Aerospace Workers did not respond to a request for comment about whether Boeing’s purchase would affect the contract.
Hill sees a risk that upper management could leave the Wichita area and move closer to Boeing headquarters. But in the short term, more jobs could be created to smooth over production shortfalls.
“Boeing is going to want to show that they’re trying to make their product safer,” Hill said. “They want people to come back to them.”
What other effects may Boeing buying Spirit have?
Spirit AeroSystems was originally a manufacturing branch of Boeing. In 2005, Boeing sold the Wichita plant, which became Spirit, to outsource production. Since then, Spirit has diversified its clients to include other aircraft companies and defense contractors, such as Airbus, Bombardier and Lockheed Martin.
But Boeing still makes up the majority of Spirit’s revenue. If it buys Spirit now, Boeing is likely to drop Spirit’s other manufacturers.
Airbus generated 20% of Spirit’s revenue last year. That’s business Hill wants to keep in Wichita.
Rolfe said a local manufacturer like Spirit draws other businesses to Wichita.
“There are a lot of other companies here in Wichita that supply to Spirit,” Rolfe said. “The impact doesn’t just go to Spirit. It goes beyond, to the other suppliers here.”
Problems that may arise further in the future
Hill said that if Boeing buys Spirit, the company will no longer be controlled in Wichita.
He said that Spirit has been heavily involved with the city and its development. If Boeing takes over, that could change and the company could eventually leave.
“They have pulled out of Wichita before,” Hill said. “So we know they’re willing to do it.”
If Spirit’s jobs leave Wichita, that could cause shortfalls in other areas, such as housing and development, because there will be fewer workers to spend money and buy homes.
Hill said that won’t happen soon, if ever. It would be too costly, he said, and Boeing needs the facility to produce its fuselages.
“The main takeaway should be that people’s jobs are safe right now,” he said. “There is so much demand for these planes that it doesn’t matter right now if there is a split or a merger. We are going to need workers.”
This article was republished here with the permission of: The Wichita Beacon