Vought Provides Update on Boeing, Nashville IAM Strikes
DALLAS. – Vought Aircraft Industries, Inc. today provided an update on the expected operational impacts of the ongoing Boeing IAM (International Association of Machinists and Aerospace Workers) strike as well as the more recent IAM strike at Vought’s Nashville facility.
“In response to the Boeing IAM strike, we have modified our operations and reached an agreement with Boeing to minimize impacts on our operating results, working capital and liquidity,” said Steve Davis, vice president and general manager, Commercial Aerostructures Division. “In addition, we have put in place our contingency plan in response to the Nashville strike.”
The Vought facilities producing Boeing commercial airplane products and most impacted by the Boeing IAM strike include Stuart, Fla.; the Marshall Street plant in Grand Prairie, Texas; Milledgeville, Ga., and North Charleston, S.C.
“To date, we have implemented changes at these sites to decrease our production levels in response to Boeing’s schedule changes by reducing overtime, moving employees to other programs, and eliminating outside contractors working at those sites,” said Davis. “We have also reached terms with Boeing on an agreement for most programs to mitigate the cash impact to Vought.” This agreement will minimize working capital and cash impacts to Vought; however, revenue recognition will be delayed until the product is actually shipped.
Other operational changes being considered in the near future at the affected sites include shortened work weeks, partial plant shut downs, and, if necessary, temporary layoffs. The duration of the Boeing strike and severity of schedule changes will impact the final decisions made at each facility.
787 Dreamliner Program
A number of actions are being taken on the 787 program at Vought’s North Charleston facility because of the continuing Boeing IAM strike, coupled with the effects of previous 787 program schedule delays. Given that Vought has already fabricated enough barrels to support deliveries through airplane 19, the company must continue to slow its production rate and take the necessary actions across the program.
Up until now, Vought has only released most of its outside assembly contractor workforce. Today, in addition to continuing this action, the company announced it is suspending its 787 composite bond fabrication operations, which will affect production and production support personnel. Assembly employees will also be redeployed to concentrate on existing fuselages closest to completion. Over the next 30 days, a variety of additional actions related to its 787 program activities are being considered, including the possible temporary shutdown of the entire plant.
“This is a challenging time for all of us who support the Dreamliner program,“ said Joy Romero, vice president and general manager, 787 Program. “Since the beginning of the Boeing strike, we’ve been looking at ways to mitigate potential employee job loss in North Charleston, including the initial reduction of outside contract labor. We plan to work with our employees to identify temporary redeployment opportunities at other Vought locations, where possible. This activity will require everyone’s patience, focused attention, and best effort to ensure a smooth continuation of required work activities, while continuing to provide customer support.”
IAM represented employees at our Nashville site voted to strike on Sept. 27. Since that time, this facility has remained open and continues to produce and deliver products. The aircraft programs built at this site include Airbus A330/A340 wing components, the Gulfstream 450 wing, the C-130 empennage, and wing panels for the Cessna Citation X.
The company is committed to keeping this facility operating during the strike and has implemented its contingency plan. The plan includes shifting personnel from other Vought sites to Nashville, adding experienced contractors, assigning Nashville salaried employees to production, and moving some of the smaller sub-assembly work from Nashville to other Vought sites.
Results indicate the contingency plan is working. Vought has met the majority of its customer delivery commitments since the strike began, even while new personnel are trained and coming up the learning curve.
“These people in Nashville are working extremely hard and doing a great job. As our temporary shop workforce gets more experience, we expect the productivity levels to continue to increase,” said Davis.
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