June 11, 2014 / 11:00 PM / 4 years ago

UPDATE 1-Engineers' union asks Spirit Aerosystems about fabrication unit sale

(Adds details, background about potential unit sale)

By Alwyn Scott

NEW YORK, June 11 (Reuters) - The union representing engineers at Spirit Aerosystems Holdings, one of Boeing Co’s biggest suppliers, said on Wednesday it has asked Spirit about the rumored sale of its fabrication business to GKN Aerospace, prompted by information supplied by its membership

The union said it has also asked Spirit whether Boeing is purchasing assembly work done by Spirit for Boeing’s aircraft programs, and that all non-Boeing assembly work was being bought by Spirit’s former CEO and at least one other partner.

In a letter to Spirit on Wednesday requesting the information, SPEEA cited U.S. labor law, noting information about a business sale or safety issues involving security provisions “are relevant ... and must be provided to us.”

Last August, Spirit said it planned to sell its operations in Oklahoma as it tried to cut costs and reverse financial losses caused by cost overruns. The operations in Oklahoma caused much of the cost overruns, analysts have said.

On Wednesday, the company said it would not speculate on rumors and that it had “no announcements to make at this time.”

“Spirit is constantly evaluating the best ways to position the business for world-class performance,” spokesman Ken Evans said in an email. “One of our challenges is to keep efficiently meeting rising production rates. With every rate increase, we look at a variety of options to efficiently create added capacity in a very congested factory.”

Representatives at Boeing and GKN did not immediately reply to requests for comment.

Spirit was created in a spinoff from Boeing in 2005, and now makes critical parts for Boeing, Airbus Group, Bombardier Inc and Gulfstream Aerospace.

The Oklahoma operations that Spirit put up for sale employ 3,000 workers, or nearly 20 percent of Spirit’s total workforce of about 16,000. About 10,000 employees work at Spirit’s Wichita, Kansas headquarters.

Reuters reported last July that GKN PLC, a British aerospace and car parts maker, was interested in buying a Spirit wing factory in Tulsa, citing people familiar with the matter.

In December, a British newspaper reported that GKN had made a bid to buy divisions of Spirit.

On Wednesday, the Society of Professional Engineering Employees in Aerospace (SPEEA) said it had heard about the planned actions from a number of its members, who work at Spirit’s factories.

It had no independent confirmation of the information from the company, but said its members have heard that 6,000 employees would be laid off.

The union said it asked Spirit about talk that the company plans to announce the moves around July 2, and has recently hired security guards and purchased riot gear for that date.

According to the union, a provision in SPEEA’s labor contract requires Spirit to disclose plans that could involve layoffs of 25 or more union members. (Reporting by Alwyn Scott; editing by G Crosse and Chris Reese)

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