Aerospace suppliers face competition for hires from planemakers

By Valerie Insinna

SEATTLE (Reuters) - Aerospace suppliers are gearing up for a hiring spree in 2023 but could face stiff competition for skilled laborers, including from their top customers - planemakers Boeing (NYSE:BA) and Airbus.

The tight labor market is a key factor in the industry's supply-chain shortages, and could determine whether Boeing and Airbus meet near-term production goals, industry officials said.

Executives at last week's Pacific Northwest Aerospace Alliance conference, a gathering of top suppliers, expressed concern about replacing workers who left through layoffs or attrition during the height of the COVID-19 pandemic.

"We just had massive, massive hiring problems in 2021 and 2022," said Chris Celtruda, chief executive of Valence Surface Technologies, which provides metal finishing and specialty coating services to Boeing and Airbus.

While staffing has "definitely gotten better," Celtruda noted small companies in Washington state that make up Boeing's supply chain will have to compete with Boeing itself, which announced plans to hire 10,000 workers in 2023 and add a fourth 737 MAX line in Everett in mid-2024.

Boeing CEO Dave Calhoun said in January that the planemaker's production rate would hinge on suppliers' ability to find trained labor.

The workforce at Orion, a subassembly manufacturer that laid off half its workforce in 2020, grew by 17% in 2022 and it plans to expand by another 33% in 2023, CEO Jerry Chase said. That means adding 30 jobs "while everybody else is trying to recruit people." But he also worries about hiring too soon, risking workers sitting around if supply-chain problems persist.

Since the pandemic, the aerospace supply chain has been hobbled by shortages in castings and forgings — particularly for aircraft engines — as well as a recent scarcity in extrusions, or other molded parts that can have lead times of up to 80 weeks, said Kevin Michaels, managing director of consultancy AeroDynamic Advisory.

“Labor is the root cause of all three (parts shortages), and these bottlenecks in turn are leading, not surprisingly, to reduced inventory,” Michaels said.

Aircraft manufacturers have expressed concerns about poaching employees from its suppliers. Airbus human resource chief Thierry Baril said in December the company is monitoring recruitment to ensure its supply chain is not weakened. The company plans to hire 13,000 workers in 2023, with more than 9,000 jobs to be located in Europe.

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Despite efforts to retain employees, overall turnover in the aerospace industry still grew from 5.8% to 7.1% in 2022, as inflation prompted workers to seek higher-paid jobs, according to a study by the Aerospace Industries Association.