DB Schenker, the freight transportation and contract logistics arm of German rail operator Deutsche Bahn AG, is the latest company to feel the downstream effects of the shutdown of Boeing Co.’s 737 MAX production line.
Schenker Inc. in Wichita, Kansas, notified the state this week that it plans to lay off 255 workers, according to a notice posted on the Department of Commerce’s website.
The Schenker workers provided logistics and supply chain management services at the Spirit Aerosystems facility in the city. Spirit Aerosystems makes fuselages and other components for the 737 MAX, which has been grounded by aviation regulators since March because of technology defects implicated in two deadly crashes. Spirit previously announced it was eliminating about 2,800 positions at the plant and more than 130 jobs at two facilities in Oklahoma. Boeing (NYSE: BA) accounts for more than 50% of Spirit’s business.
Large companies are required to give 60 days advance notice of layoffs involving more than 50 workers.
Boeing has a vast supply chain and vendors are beginning to feel a cash pinch as Boeing stops receiving shipments and making payments. Boeing is expected to compensate some suppliers for losses or provide other assistance to ensure they are ready to start producing again once the Federal Aviation Administration certifies the MAX to fly again.
Boeing this week said it doesn’t expect approval to come until midyear, but new CEO David Calhoun on Wednesday said the aerospace giant would slowly restart production weeks before authorities give the green light to resume service..
Meanwhile, airlines are slashing their schedules for the 737 MAX through at least June and rebooking passengers on other flights, often using aircraft they planned to retire.