Boeing Supplier Concerns Over Job Security During Strike
Impact of Boeing's Strike on Aerospace Suppliers
The ongoing strike at Boeing has raised significant concerns among its suppliers, particularly with regards to workforce stability. Aerospace supplier Pathfinder Manufacturing is one of the companies feeling the effects, having recently been forced to furlough 14 out of its 54 employees due to the two-week-old strike. Dave Trader, the CEO of Pathfinder, expressed his worries about the potential need for further layoffs if the strike continues.
Challenges in Recruiting New Talent
Pathfinder plays a crucial role in attracting new talent to the aerospace industry, offering training programs in conjunction with skilled workers. However, the halt in operations has also affected high school students who were learning about aerospace careers at Pathfinder, sending them back to their normal classrooms. Trader shared the company's commitment to keeping employees engaged and prepared for when operations resume, despite the financial strain this puts on their resources.
The Toll on Workers and Training Programs
Pathfinder is not only furloughing its employees but is also responsible for overseeing health care benefits for these workers. The aim is to incentivize their return once orders start to increase again. Trader himself wears multiple hats as both CEO and fundraiser, as Pathfinder operates a nonprofit “Work Force Development Center” intended to equip high school students and adults with disabilities in the Puget Sound area with vital aerospace skills.
Supply Chain Struggles
The strike has implications that extend beyond just Pathfinder, affecting an entire supply chain. Approximately 30,000 machinists stopped working at Boeing's West Coast factories, which resulted in a halt in production for key airplane models, including the best-selling 737 MAX. The wider supply chain is concerned about how the aftereffects will impact their ability to retain a skilled workforce during this period of uncertainty.
Furloughs and Investigations
Reports from other suppliers indicate that many are beginning to furlough their own employees or delay upcoming investments due to the strike. The situation reflects a broader strain in the aerospace workforce, particularly with other strikes affecting companies like Textron. Trader noted that Boeing's recent inspections at Pathfinder included inquiries about the ease of getting employees back into work once furloughs commence.
Cash Flow Challenges
Boeing has enacted rolling furloughs for most of its white-collar employees and has put a freeze on parts orders, adding to the uncertainty. The company faces numerous setbacks, including a grounding of the 737 MAX after serious incidents and the downturn of air travel during recent challenging economic periods. All these factors create a delicate balance for Boeing as it struggles to maintain both operational readiness and financial stability.
Strategizing for the Future
With its credit rating slipping towards junk status and losses in its defense sector, Boeing is under pressure to stabilize its supply chain. While it has historically aimed to keep supplier lines busy by absorbing inventory, recent circumstances are forcing the company to reassess its approach to supporting its supply partners.
New Tech Industries Example
On the other side of Boeing’s grand Everett factory, New Tech Industries, which relies on Boeing for 85% of its business, is also in a precarious position. Co-owner Carmen Evans highlighted that while their backlog of orders will allow them to continue operations for some time, the lack of new orders poses significant future challenges. The company has already reduced its workforce and postponed machinery upgrades, indicating the uncertainty affecting local suppliers stemming from Boeing's ongoing challenges.
Preparing for Possible Shifts
Hesitance to invest in growth until the strike situation stabilizes reflects a broader unease felt by many suppliers. Some are even exploring opportunities with Airbus, although the transition is fraught with challenges. A source mentioned that becoming part of an Airbus program typically takes about 18 months, leaving local suppliers with a challenging gap to fill.
Conclusion
The ongoing situation underscores the vulnerability of the aerospace supply chain amidst labor unrest. As the industry braces for potential aftershocks post-strike, stakeholders are united in anticipation of a rapid hiring surge. Trader emphasized that despite the current challenges, the ultimate outcome post-strike is likely to result in a scramble for talent as companies aim to ramp up production swiftly and efficiently.
Frequently Asked Questions
What is the current situation with Boeing's strike?
Boeing's strike has been ongoing for two weeks, affecting production and leading suppliers to furlough workers.
How has Pathfinder Manufacturing been impacted?
Pathfinder has furloughed 14 employees and suspended training programs for high school students due to the strike.
What steps is Pathfinder taking to support its workers?
Pathfinder is covering health care benefits for furloughed workers to encourage their return once operations resume.
How does the strike relate to the aerospace workforce?
The strike has highlighted existing challenges within the aerospace sector, including worker shortages and the recruitment of new talent.
What is the outlook for Boeing and its suppliers after the strike?
Experts expect a race to hire skilled workers due to the increased demand for production post-strike.
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