Labor Strike at Boeing Triggers Layoffs at Other Companies

Jakarta –

The strike by 33,000 Boeing workers affected the operations of several companies in the upstream aerospace sector in the United States. This is what happened to the aluminum manufacturer for aircraft parts, Independent Forge.

According to Reuters, on Saturday (26/10/2024), the strike by Boeing workers caused the plane manufacturer to stop several of its operating lines. Since there is no production, this condition has a direct impact on the demand for spare parts and other aircraft components.

The decline in demand for aircraft spare parts and components is causing small manufacturers like Independent Forge to lose orders. As a result, this company laid off several of its employees, and now there are only 22 people left.

In addition, the company had to cut its operating hours from five days a week to three days a week in order to save costs and retain the remaining employees. This is important because the remaining workers are specialists who can make spare parts according to Boeing’s requests when the aircraft manufacturer starts operations.

“They are the backbone of our shop. Their knowledge, I can’t replace it,” said Independent Forge president Andrew Flores.

Beyond that, five other Boeing suppliers interviewed by Reuters this week said the strike would force them to lay off workers, freeze investment or consider halting production.

Patfinder, a Boeing supplier in the Seattle area, for example, may have to lay off more workers due to reduced orders due to this strike. Even though this small supplier laid off a quarter of its 54 employees last month.

Then, according to the US aerospace industry group (Aerospace Industries Association), approximately 60% of the 2.21 million Americans who work in this industry have jobs directly related to the Boeing supply chain.

This strike is therefore thought to have a wider impact on the US upstream aviation industry and the supplier’s decision to reduce staff could create a ‘vicious circle’.

This is because the large discounts in the upstream sector will put pressure on Boeing’s efforts to restore 737 MAX production above the limit set by the regulator of 38 after the factory reopens.

“Once we get back online, we’re tasked with restarting factories and supply chains, and it’s much harder to turn them on than to turn them on,” CEO Kelly Ortberg said in an analyst call on Wednesday .

“The longer this (Boeing strike) goes on, the more difficult things will become to go back to the supply chain and cause delays there,” said Chief Operating Officer Southwest Airlines (LUV. N) Andrew Watterson on Thursday’s strike.

(hns/hns)