Boeing supplier shuts down plant after workers vote to strike

By Vanessa Yurkevich, CNN

New York (CNN) — Spirit AeroSystems, a key supplier to Boeing, shut down its factory in Wichita, Kansas, on Thursday after workers represented by the International Association of Machinists and Aerospace Workers voted to strike.

The suspended production comes after employees voted down Spirit AeroSystems’ “best and final offer” and then authorized a strike, according to the union. The work stoppage is set to begin on Saturday.

The International Association of Machinists and Aerospace Workers, or IAM, represents about 6,000 workers at the plant. The contract was rejected by 79% of members and 85% voted to strike, the union said.

“The IAM’s dedicated and hardworking membership at Spirit AeroSystems has worked without fail during tumultuous times, including a pandemic that saw everything grind to a halt. Most of our members have concluded that the company’s offer is unacceptable,” the union said in a statement late Wednesday.

In response, Spirit AeroSystems (SPR) said IAM-represented employees should not report to work on Thursday morning but will receive pay.

“We are disappointed that our employees represented by the IAM rejected our four-year contract offer and voted to strike. We believe that our fair and competitive offer recognizes the contributions of our employees and ensures we can successfully meet increasing demand for aircraft from our customers,” the company noted it its statement.

The union is now in the process of polling its members to see where the main concerns and issues with the proposed contract are. Those results are expected in the coming days, the union said.

“We are anxious to see what our memberships says, and we will try to get their concerns addressed,” said Rickey Wallace, general vice president of the IAM – Southern Territory.

A federal mediator has been assigned to help facilitate discussions and mediate a deal, at the request of the union.

The two sides, who have been negotiating since May, had come to a tentative agreement last week. The proposed deal included a 34% pay increase, continued health insurance, a 14.7% increase in retirement benefits with a new 401k match, voluntary Sunday overtime, and increased time off, according to the union. But rank and file members voted down the contract Wednesday.

Spirit AeroSystems is one of the world’s largest manufacturers of aerostructures, airplanes including fuselages and wing components. The company supplies parts for seven Boeing models and four Airbus models as well as for Bombardier, Northrop, Bell Helicopter, Mitsubishi and Lockheed.

“It’s a concern,” said Wallace of being able to service Spirit AeroSystems’ clients. “Our wish is to get this resolved as soon as possible and get our members back to work and get Spirit AeroSystems moving again.”

Analysts suggest an even more robust financial contract for workers will have inflationary implications for the rest of the industry.

“We don’t know the price to make these workers happy. That’s scary,” said Richard Aboulafia, an analyst and managing director at AeroDynamic Advisory. “This is an industry that’s been deflationary for decades. This is new terrain.”

The IAM and Spirit AeroSystems are coming off a 10-year contract agreement negotiated in 2010, with a three-year extension in 2020.

“It’s been a long time since the parties have been to the table. Some of it’s frustration over that,” Wallace said of the membership’s vote not to ratify the deal. “It’s a fairly rich contract offer.”

The strike is scheduled to begin at 12:01 am CT on Saturday June 24 when IAM’s current contract with Spirit AeroSystems expires. The two sides say they still intend to meet at the bargaining table again soon.

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