The ongoing machinists’ strike at aerospace stock Boeing (BA) is impacting its suppliers. In fact, Spirit AeroSystems (SPR) just staged furloughs of its own, hoping to ride out the storm of lower production and reduced revenue. The move was not good news for Boeing, which is down fractionally in Friday afternoon’s trading.
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Spirit will be furloughing 700 workers in response to the now sixth week of Boeing’s strike. Interestingly, the furloughed workers targeted will be the ones focused on 777 and 767 construction. Those who make 737 MAX fuselages will continue to work accordingly, reports note. That is a move that makes some sense, as much of Boeing’s backlog was in the 737 MAX category, and the fuselages will likely find a home as long as Boeing does not close outright.
The 700 workers furloughed represent about 5% of Spirit’s workforce in the United States, and this may not be the end. If the strike continues, spokesman Joe Buccino noted, further furloughs will likely have to follow, as will outright layoffs.
Another Hit from the FAA
As if all that were not enough, Boeing is now subject to another safety review from the Federal Aviation Administration (FAA), noted a report from Reuters. This latest safety review will take about three months to complete and represents “…part of our aggressive oversight to ensure Boeing has the right tools to sustain lasting changes to its safety culture.”
Of course, one could safely wonder if this is the start of getting the production caps taken off. While that may prove to be a factor, there are no signs that this is anything more than another attempt at oversight on the FAA’s part. If the review goes well, though, Boeing may be able to get the caps lifted later.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 14 Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 15.31% loss in its share price over the past year, the average BA price target of $197.83 per share implies 27.63% upside potential.
