Boeing Lands Delta Contract Spokane Facility Will Build Replacement Floor Panels

The Boeing Co. said Monday it has signed a five-year contract with Delta Air Lines to build replacement floor panels at its Spokane facility for all of Delta’s airplanes.

Although Boeing provides a variety of replacement parts for the aircraft it makes, the aerospace giant now also will be involved in an airline’s planned maintenance work.

Delta, like other airlines, regularly removes floor sections to inspect wiring and other components. The deal with Delta is expected to generate demand of up to 10,000 replacement floor panels a year. Previously the airline cut and drilled its own replacement panels. Other airlines contract the work.

Boeing won the Delta contract in part due to the efficient manufacturing process at its Spokane plant, resulting in lower product costs, officials said.

And at a time when Boeing is trimming its work force and cutting costs to boost its bottom line and regain investor confidence, the deal with Delta will result in fewer worker layoffs in Spokane.

Boeing has said it would reduce its Spokane work force of about 600 by about 100 during the second half of the year. On Monday, Thomas Som, the general manager for Boeing in Spokane, said that number has been lowered to 85.

The floor panel work for Delta will start with 757s, eventually expanding to include the airline’s entire fleet.

The replacement parts will be shipped from Spokane, not installed here.

Carolyn Corvi, Boeing vice president of aircraft systems and interiors, said the floor panel program - and other types of possible “after-market work”- are viewed as a revenue growth area. She noted that Boeing is in discussions with other major carriers, including American Airlines, in hopes of doing similar work.

Corvi did not reveal how much the Delta contract is worth. However, she said Boeing is looking at moving beyond floor panel work to other replacement parts, such as side walls.

“We think there is an opportunity for this kind of after-market support,” Corvi said.

Bill Johnson, president of District 751 of the International Association of Machinists and Aerospace Workers, the union that represents Boeing production workers, said the floor panel venture is a good way to keep Boeing jobs in-house.

And although the Delta agreement for now just saves 15 jobs, future employment could increase significantly.

“There’s potential for hundreds of (new) jobs here,” said Som, noting it depends on the growth of after-market work.

Analysts like Shawn Narancich, an analyst with D.A. Davidson & Co. in Great Falls, Mont., greeted the announcement about expanded after-market activities with little excitement.

“I don’t believe their after-market business is going to support their earnings in a down cycle,” he said.

The Boeing facility west of Spokane opened in 1990 to make air ducts, flight deck components and floor panels.

RELATED STORY MORE CUTS Boeing said Monday it will be able to cut 6,700 more jobs throughout its operations than expected, thanks to reduced overtime and other manufacturing efficiencies in its commercial airplane division. The additional job cuts will mean that total job reductions by the end of the year will be at the high end of a range of 28,000 to 38,000 that the company announced earlier, Boeing said. Spokane is not expected to be included in the additional cuts, a company official said.