Spirit AeroSystems eyes end to strike with sweetened offer, Airbus and Boeing supply chain to benefit.
Spirit AeroSystems, a significant player in the aerospace sector, and the International Association of Machinists and Aerospace Workers union have achieved preliminary consensus on a fresh labor contract, an essential step towards resuming stalled production of integral components for Boeing and Airbus aircraft.
The revised deal offers an improvement on the previous proposal, enhancing health insurance benefits and wage increments. The contract would also address workers' concerns over obligatory overtime—a significant issue that has been a major grievance for the strikers.
Union officials are encouraging their members to approve the four-year plan in a vote scheduled for June 29. Last week, workers challenged the union leadership by overwhelmingly rejecting the earlier offer and voting in favor of a strike.
Spirit could quickly put an end to a disagreement threatening the production of Boeing’s 737 Max, a lucrative aircraft crucial to both the company and the airplane manufacturer, if the new proposal is ratified. Both Spirit and Boeing saw a premarket rise in the US on Wednesday, by 1.9% and 1.3% respectively.
Operations at the Wichita, Kansas-based aerospace supplier have been on hold since about 6,000 Machinists voted for a strike on June 22. The cash-flow challenged Spirit is estimated to forfeit around $100 million in revenue per week of the work stoppage, according to Jefferies analyst Sheila Kahyaoglu.
The latest proposal seeks to resolve several contentious points that have exacerbated workers' dissatisfaction. Spirit pledges to abolish mandatory overtime during weekends, while ensuring its existing primary insurance scheme and prescription drug list remain intact. The company has also put on the table a 23.5% increase in wages over the contract's duration, incorporating a 9.5% surge in overall compensation in the first year.
Spirit, established as an independent entity from Boeing in 2005, is the globe's leading independent supplier of airplane structures. The company fabricates roughly 70% of the structure for Boeing’s 737 model and ships the fuselages by rail to its factories near Seattle. Spirit also plays a key role in the production of all of Boeing's 7-series commercial jets, including the 787 Dreamliner, and Airbus's A220.
