Workers who build parts for the 737 Max have been laid off or had hours cut at a nonprofit that provides jobs for people with disabilities

boeing 737 max

  • Numerous workers at Skills Inc., an Auburn, Washington-based manufacturing company that builds parts for the Boeing 737 Max plane, have been laid off, furloughed, and had hours cut.
  • Skills Inc. is a nonprofit, which offers training and jobs for people with disabilities - about 60% of the company's staff of 600 have a self-identified disability.
  • Business Insider spoke with employees and reviewed communications from the company. Workers say the cuts are a direct result of Boeing suspending production of the troubled 737 Max.
  • Visit Business Insider's homepage for more stories.

Numerous employees at Skills Inc, an Auburn, Washington-based supplier for Boeing, have been laid off, furloughed, or had hours cut, current and former employees told Business Insider. It's the latest in the fallout from Boeing's decision to suspend production of the troubled 737 Max airplane.

Skills, Inc is an aerospace manufacturer and supplier, and is among about 600 companies that builds components for the Boeing 737 Max. Unlike similar companies, however, Skills is a nonprofit.

The company, which describes itself as a "business with a social mission," is a "self-supporting nonprofit social enterprise" that offers training and employment for people with disabilities.

Skills has about 600 employees, according to its website, and says that 60% of workers have a self-identified disability. The company describes itself as "a fully integrated work environment where individuals with and without disabilities work side-by-side throughout our four lines of business."

In a termination letter sent to some affected employees, and seen by Business Insider, Skills Inc.'s CEO Todd Dunnington said that the company's staffing imbalance, which was caused by "reduced production rates at our largest customer," was initially expected to be short-term but is now "forecasted to last for an unknown amount of time."

Several employees confirmed to Business Insider that they had been told the layoffs were due to reduced demand by Boeing.

Workers at the company were left blindsided and scrambling, but while they were unhappy about the situation, most of the employees Business Insider spoke with had only positive things to say about Skills.

"I simply hope to hear from my Skills supervisor before my savings and food run out," one employee, who had been laid off, told Business Insider. "I am more fortunate than many in that I have family and friends in Seattle who will make sure I do not end up homeless." The employee, who suffers from a chronic illness affecting their vision, dexterity, and cognitive and memory abilities, asked to not be named in this story.

"I'm so sad," another employee, who was near retirement age and was laid off, told Business Insider. "I wasn't ready to be put out to pasture."

Representatives at Skills Inc. did not reply to repeated requests for comment and attempts to connect.

The total number of affected employees was not immediately clear.

The 737 Max crisis at Boeing ripples through the US labor market.

Boeing announced in December that it would temporarily suspend 737 Max assembly and acceptance of supplier components starting this month. The 737 Max has been grounded worldwide since the March, 2019 crash of Ethiopian Airlines Flight 302, the second fatal crash within five months. A total of 346 people were killed between the two crashes of the jet, the latest model of Boeing's workhorse 737 narrow-body.

Boeing reduced production of the Max from 52 to 42 units per month as of April 2019, but it had otherwise maintained production throughout the grounding. However, it has been unable to deliver completed planes to customers during the grounding, leading to a pileup of about 400 completed planes at its facilities, stretching its storage capabilities.

While announcing the production suspension, Boeing said that it had no plans to lay off or furlough any of the 12,000 employees at the facility that assembles the 737 Max, instead temporarily reassigning workers to other tasks or teams.

However, Boeing has around 600 suppliers that build components or provide services related to the Max, some of which earn a substantial portion of their revenue from Boeing contracts related to the plane. Boeing is the largest exporter in the US, which, coupled with the number of suppliers it buys from, can lead to an outsized effect on workforces around the country - Boeing has just over 150,000 employees across its commercial, defense, and global services divisions, but the actual number of engineering and manufacturing employees touched by the plane is far greater.

Earlier this month, Spirit AeroSystems, which builds fuselages for the plane, announced it would lay off 2,800 workers at its Wichita, Kansas, factory due to the 737 Max production halt, with smaller cuts at its Tulsa and McAlester, Oklahoma, facilities planned. Spirit said that building components for the 737 Max accounts for about 50 percent of its annual revenue. An employee told Business Insider that layoffs would begin to take effect this week.

General Electric (GE), which builds power plants for the of the 737 Max, along with other planes, laid off 70 temporary employees at a factory in Quebec, but GE's aerospace engines division has a far more robust client base than some other suppliers.

Boeing takes delivery of components and completes assembly of the planes at its Renton, Washington, factory.

Boeing has been scrambling to complete a fix for the 737 Max and get the plane recertified by the Federal Aviation Administration. However, the plane-maker has suffered numerous setbacks, and is without a timeline for returning the plane to service.

Get the latest Boeing stock price here.

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