A New Headache for Boeing. Spirit Aero Stock Tanks as Workers Vote to Strike.

“We are disappointed that our employees represented by the IAM rejected our four-year contract offer and voted to strike,” read part of Spirit Aero’s statement. “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.”

Both
Boeing
and its rival
Airbus
(AIR.France) have been trying to boost production to meet rising demand. It hasn’t been easy. Skilled workers left the industry during the pandemic and suppliers have struggled to attract and re-train talent.

Both would like to see production start to approach a combined 2,000 jets a year in the coming years. The best year ever for commercial jet deliveries was about 1,600 in 2018. Just 753 jets were delivered in 2020, amid the pandemic and the worldwide grounding of the Boeing 737 MAX following two deadly crashes. Wall Street projects almost 1,300 combined deliveries for 2023, rising to more than 1,800 by 2026.

The strike isn’t going to help. Spirit Aero supplies about 70% of Boeing’s narrow-body aircraft and defense and business jet structures. If the strike goes on too long, 737 MAX production will be impacted.

“We continue to monitor the situation and support our valued supplier,” Boeing told Barron’s in an emailed statement.

Spirit Aero stock was down 8.2% in premarket trading, while
S&P 500
and
Dow Jones Industrial Average
futures were both down about 0.2%.

Boeing stock declined almost 3%. Airbus shares haven’t been spared either. They fell 1.7% in overseas trading. Spirit Aero supplies it too.

The suspension will overshadow positive news coming out of the Paris Air Show, which continues Thursday. The two aircraft makers have announced orders for more than 1,000 jets over the past few days.

Write to Al Root at [email protected]