Spirit AeroSystems Holdings Inc. workers approved a new labor contract, ending a six-day strike that threatened to disrupt output at planemakers Boeing Co. and Airbus SE.
(Bloomberg) — Spirit AeroSystems Holdings Inc. workers approved a new labor contract, ending a six-day strike that threatened to disrupt output at planemakers Boeing Co. and Airbus SE.
About 6,000 members of the International Association of Machinists and Aerospace Workers at Spirit voted Thursday to ratify a four-year contract with the aerospace company, the union said. Some 63% of those who cast a ballot backed the deal.
The shutdown at Spirit, which makes most of the 737 Max’s fuselage, struck as Boeing prepares to step up production rates of both the Max and Dreamliner, two critical sources of cash. Machinists will return to work on July 5, limiting the damage from the walkout.
“We continue to monitor the situation as we assess any potential impacts to production and deliveries,” Stan Deal, head of Boeing Commercial Airplanes, said in a memo to employees that was seen by Bloomberg News.
Shares of Spirit were down 0.9% at 9:55 a.m. in New York. Boeing was down 0.6%.
Output at Spirit has been at a standstill since June 22, after rank-and-file Spirit employees in Kansas rejected an offer that was backed by union leaders and voted to strike.
Union negotiators and Spirit reached a new tentative deal Monday with sweetened terms for health insurance and higher wages. The new contract would also limit mandatory overtime, another sticking point for striking workers.
The new contract will add about $30 million of incremental costs per year at Spirit over the initial proposal, Ken Herbert, an analyst with RBC Capital Markets, said in a research note. While he expects incremental production delays on the 737 and other Boeing programs, “we do still believe Boeing can meet its delivery targets for the full year.”
Spirit said it will begin restoring operations at its main Wichita plant on Friday and work to fully restore production by July 5. The company makes about 70% of the frame for Boeing’s 737 Max, the nose section of the 787 Dreamliner as well as engine pylons for Airbus’s A220 jet.
In a statement, Spirit Chief Executive Officer Tom Gentile said the company had “listened closely to our employees and brought forward a fair-and-competitive offer.”
(Updates with US trading in fifth paragraph. Adds analyst’s comment)
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