Mike (Mish) Shedlock | Jan 15, 2020 12:33AM ET
New plane orders at Boeing (NYSE:BA) are the lowest since 2005 and deliveries the lowest since 2005. Blame the Boeing 737 Max.
Due to never-ending 737 Max issues, plane orders at Airbus have soared while Boeing orders fall to a 16-year low .
The 737 Max woes are starting to impact Boeing suppliers like Spirit AeroSystems. A couple of weeks ago, Spirit announced it would shift its workforce around to work Airbus production.
On January 10, Spirit AeroSystems announced a 2,800 worker lay off.
The biggest Boeing 737 MAX supplier said it is planning an initial 2,800 layoffs, the first announced job cuts since the grounding of a plane that is rippling through the broader aerospace industry.
Spirit AeroSystems Holdings Inc. makes the fuselage and engine parts for the MAX and had been producing enough for 52 jets a month before Boeing said it would freeze assembling the planes in January for a “temporary” time.
Spirit Chief Executive Tom Gentile said the decision was a “necessary step” given the uncertainty with MAX production. The company said it could have to cut more workers.
h3 Internal Comments Released/h3Also on January 10,Boeing released internal documents showing some employees mocking the aircraft and another bragging about tricking the FAA into certification.
Also, recall the opinion of Leeham regarding a tariff spillover. Analysts at Leeham commented:
"Airbus is almost certain to become a target for higher tariffs. I won’t rule out adding the Mobile (AL) final assembly line to sanctions despite Alabama being the No. 1 supporter of Trump. There is no way Alabama will vote for a Democratic challenger to Trump; it’s a completely safe state"
Meanwhile, Airbus to expand in UK after Brexit.
h3 Manufacturing Already Weak/h3The latest ISM report was a disaster: Manufacturing ISM is own for the 5th month to the lowest since June 2009.
Following the GM strike, there was a job recovery that lasted precisely one month. Manufacturing jobs unexpectedly declined by 12,000.
Expect another 2,800 or so layoffs from Spirit.
Trump and China will Sign a Trade War ceasefire, but that will not restore any jobs.
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