Another Boeing supplier is laying off workers as it scrambles to deal with the 737 Max production halt

Boeing 737 Max 2

  • Another Boeing supplier is laying off staff as companies providing parts for the embattled 737 Max aircraft scramble to deal with the plane's production shutdown.
  • GE Aviation said Monday that it plans to cut 70 temporary jobs at its plant in Bromont, Canada, which works on several engines, including the CFM Leap 1-B, the engine installed on the 737 Max.
  • GE Aviation's announcement comes days after Spirit AeroSystems, which builds 737 Max fuselages, said it is cutting 2,800 staff.
  • Boeing initially said it would not lay employees off during the suspension, but the company has more than 600 suppliers which depend on the Max for revenue.
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Another Boeing supplier is laying off staff as companies providing parts for the embattled 737 Max aircraft scramble to deal with the aviation giant's production shutdown.

According to several outlets, GE Aviation on Monday announced plans to cut 70 temporary jobs at its plant in Bromont, Canada, which works on several engines, including the CFM Leap 1-B, the engine installed on the 737 Max.Advertisement

The cuts represent around 13% of all production staff working at the Bromont plant, in the province of Quebec, according to aviation news site Flight Global.

GE Aviation is a part of the General Electric (GE) conglomerate. GE in its entirety makes around 2.4% of its revenues from Boeing, according to Bloomberg.

GE Aviation has no additional "large scale" layoffs planned, Flight Global reported it as saying, but it did not rule out future layoffs entirely.
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"A key priority is protecting our ability to ramp production back up," said a GE Aviation statement, according to Flight Global.

News of layoffs at GE Aviation comes days after Spirit AeroSystems - which builds the fuselages and several other parts for 737 Max jets - announced that it will cut 2,800 jobs in response to the production halt. Spirit AeroSystems makes around 80% of its revenue from Boeing, Bloomberg data shows.Advertisement

Layoffs at Spirit were announced on the same day that the fired Boeing CEO Dennis Muilenburg was given a $62 million payout.

Boeing 737 Max fuselages

The 737 Max remains grounded by regulators around the world after two fatal crashes killed a total of 346 people. It has now been grounded for nine months, significantly longer than many in the industry predicted.Advertisement

Boeing shut down production of the 737 Max in December, and did not say when production will resume.

An extended production slowdown could have a significant effect on its bottom line. Other companies in the supply chain are facing similar problems.

While Boeing has said it has no immediate plans to lay off or furlough those who work on the 737 Max while production is stopped, there are fears more suppliers will have no choice but to follow the lead of Spirit and GE Aviation.Advertisement

Boeing has the ability to absorb the costs of paying idled workers, but many of its smaller suppliers probably do not.

Get the latest Boeing stock price here.

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