Key things
- Spirit AeroSystems shut down production at its Wichita, Canada plant ahead of a union strike.
- Union members rejected the company’s four-year offer and planned a Saturday walkout.
- Spirit is a supplier to Boeing, Airbus and other airlines.
Shares of Spirit AeroSystems Holdings (SPR) plunged more than 10% Thursday morning as the aircraft parts maker suspended operations at its Wichita, Canada plant due to an upcoming strike by union workers.
The world’s largest manufacturer of aerostructures for commercial aircraft, business and regional jets and defense platforms said Spirit will shut down production ahead of tomorrow’s contract expiration date following the International Association of Aerospace Engineers (IAM) yesterday’s decision to walk off the job. He advised all IAM members to stay at home, while non-unionists should go to work as usual.
The IAM rejected Spirit’s offer of a four-year contract, with the union saying 79% voted “no” and 85% voted in favor of the strike, which starts on Saturday. The company said it was a disappointing result and that the deal was “fair and competitive”, recognizing the contributions of its employees and “ensuring that we can successfully meet the growing demand for aircraft from our customers”.
Boeing (B.A) and European Airbus are among Spirit’s customers. Boeing responded by noting that it continues to monitor the situation and “supports our valued supplier.”
Boeing stock (B.A), Textron (TXT), and others supplied by Spirit also declined following the news.