Boeing’s decision to temporarily halt production of its new signature aircraft because of safety concerns isn’t likely to hit manufacturers in the Inland Northwest for several weeks, if at all, experts said Tuesday.
Spokane is home to more than 120 aerospace companies employing 8,000 people, according to Greater Spokane Incorporated, the region’s chamber of commerce. Many of those companies, if they’re suppliers of the Chicago-based corporation, provide products farther down the supply chain, said Mark Norton, chairman of the board of directors for the Inland Northwest Aerospace Consortium. It may be weeks before those companies know what, if any, changes Boeing will make to its orders as it awaits the Federal Aviation Administration’s safety determination on the 737 Max jet.
“Most of our group, fall in that tier 2 or tier 3 area,” said Norton, referring to Boeing’s supply-chain structure in which lower-tier suppliers make products that are shipped elsewhere before Renton, Washington, where the 737 Max is manufactured. “They’re one step removed from working with Boeing directly.”
Boeing announced Monday it would halt production of the aircraft temporarily beginning in January, sending its stock tumbling as the company seeks approval to put the Max back in the sky after a pair of deadly crashes in Indonesia and Ethiopia. The crashes have been blamed on the failure of onboard software intended to prevent stalling, and the FAA has yet to sign off on a fix.
That approval will eventually come, said Dean Cameron, the Spokane Valley publisher of the trade publication Northwest Aerospace News Magazine and a three-decade veteran of the aerospace manufacturing industry. In the meantime, he said, Boeing is unlikely to reduce orders as it looks to stock up on supplies for when the plane is approved for flight and manufacturing resumes.
“When they turn the switch back on, they’re going to need these people,” Cameron said.
Norton said a ripple effect on the local economy is likely, but he also pointed out the types of jobs that would be affected by changes in Boeing supply orders are also in high demand from other companies.
“In terms of local impact, I think you might see some companies pulling in their horns a little bit,” Norton said.
A representative of Exotic Metals Forming, a sheet metal fabricator for aerospace with a manufacturing facility on the West Plains, said Tuesday the company won’t know Boeing’s effect on its operations until after the holidays. Other companies in the region either didn’t return calls for comment on Tuesday or said they weren’t manufacturing parts for the new jet and thus do not anticipate any changes.
Kaiser Aluminum sells products to Boeing, but the company said through a spokesman Tuesday it couldn’t yet comment on the effect the jet’s halted production would have on its rolling mill in Trentwood.
Also Tuesday, Southwest Airlines announced it was removing the 737 Max from its flight schedules through April 13, after recently agreeing to a settlement with Boeing over a projected $830 million in losses in 2019 tied to the grounding of the aircraft. Southwest, the largest customer of the new aircraft in the United States, will not see any service reductions in the spring from Spokane International Airport because of the 737 Max issues, a company spokesman wrote in an email.
“As I look at the revised period for Spokane, I see no changes,” Brad Hawkins, a Southwest Airlines spokesman wrote in an email Tuesday. There will be one fewer flight to Las Vegas on Sundays during the spring, but Hawkins said that schedule change is routine for the airline during the late winter and early spring months.
Local journalism is essential.
Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are not tax deductible, but are predominately used to help meet the local financial requirements needed to receive national matching-grant funds.
Subscribe to the Coronavirus newsletter
Get the day’s latest Coronavirus news delivered to your inbox by subscribing to our newsletter.