Spirit AeroSystems, a key Boeing supplier, is temporarily laying off workers on its 737 production line.

Spirit, based in Wichita, Kansas, builds the entire fuselage for Boeing’s 737 Max planes and the forward fuselage for most of Boeing’s other commercial aircraft. The fuselages are constructed at Spirit’s Wichita factory and then shipped by train to Boeing’s Renton, Washington, facility.

Boeing is set to acquire Spirit, bringing production back in house after nearly two decades in an effort to improve manufacturing quality and safety. The $4.7 billion deal has been in the works since last year, and is expected to close later this year.

In the meantime, Spirit told employees Friday it would temporarily lay off 250-350 people to manage inventory levels, according to a company email shared with The Seattle Times.

“Over the past several years, we’ve overproduced and accumulated a parts surplus. As a result, we must implement temporary layoffs in certain areas to reduce inventory levels,” the email read. “While the impact this may have on the team is unfortunate, these actions aim to support the long-term stability of our workforce and our program.”

The layoffs and “production pauses” are temporary, the email continued. They will affect 737 fabrication and composite fabrication related to 737 thrust-reverser work.

Spirit has been plagued by manufacturing defects and reports of unsafe processes in its factories for years. The supplier was swept up in regulatory scrutiny following a panel blowout in January 2024, when a piece of the fuselage blew off a 737 Max 9 plane midflight. That fuselage had been produced in Spirit’s Wichita factory before being shipped to Boeing machinists in Renton.

Boeing is set to acquire practically all of Spirit’s operations related to Boeing’s commercial planes, as well as some defense and aftermarket assets.

But Boeing is carving off some parts of Spirit that produce airplane parts for European manufacturer Airbus. On Monday, Spirit and Airbus announced an agreement for Airbus to acquire some Spirit facilities in the U.S., Europe and Africa, bringing the acquisition one step closer to being finalized.

On Thursday, Spirit reported its first-quarter revenue dropped 11% compared to the same three months last year due to lower production activity on most Boeing programs, particularly the 737.

In the first three months of 2024, Spirit had been preparing for an expected 737 production rate increase, but that was put on hold after the panel blowout. Boeing’s 737 production is still capped at 38 planes per month following a mandate from the Federal Aviation Administration.

Spirit lost $613 million, or $5.21 per share, in the first three months of this year, compared to a loss of $617 million, or $5.31 per share, in the same period last year.

Spirit’s backlog at the end of the first quarter this year was about $48 billion.

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