Troubles at Boeing and Airbus will lead to job losses for UK supplier

The crisis at Boeing and delays in the return to full production at Airbus will lead to lay-offs at Senior, the UK engineering group.
While many end-manufacturers are blaming problems in their supply chain for their struggles to get back to pre-pandemic performance, Senior, a member of the FTSE 250, is paying the price for being a key supplier to the world’s two great — but troubled — aircraft producers.
A warning, amid strikes at Boeing and stalling deliveries at Airbus, that demand has fallen for its engine parts, fuel ducts, and valves and machined parts connecting various aircraft structures, sent shares in Senior down more than 12 per cent, closing on Tuesday at a near two-year low of 128p.
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Three years ago the company rejected a 200p a share takeover by the US private equity firm Lone Star. Before the fatal crashes of the Boeing 737 Max six years ago, Senior shares were above 300p.
In a trading statement following the close of the third quarter of its financial year, Senior told investors: “In the near-term, as has been extensively reported, the commercial aerospace manufacturing industry is facing temporary but significant headwinds.
“Boeing’s production rates this year on the 737 Max have been restricted under the oversight of the Federal Aviation Administration following the Alaskan Airlines incident early in 2024 [when an emergency door panel blew out in flight].”
The company admitted that it thought things had been looking up following Boeing’s promise that the build rate on the 737 Max would rise to 38 per month by the end of the year.
The statement added: “However, with the employee strike at [Boeing’s] commercial aircraft operations in the Puget Sound area [around Seattle] now in its fourth week, there is an inevitable impact on our operating businesses most exposed to this customer, both directly and through its ‘tier 1’ suppliers.
“In addition, Airbus has publicly been clear about the supply chain challenges it has been facing, particularly on engines and interiors. Other parts of the Airbus supply chain we have contracts with have generally produced in line with originally scheduled rates.
“Consequently, there appears to be an imbalance of supply into different parts of the aircraft and we have recently been informed by one of our customers, an Airbus ‘tier 1’ supplier, that they intend to significantly reduce scheduled deliveries from Senior in the fourth quarter of this year before returning to normal during the second quarter of next year.”
It continued: “While the full impact on our businesses exposed to the affected programmes is not yet certain, we have moved decisively to contain costs and preserve cash.”
Those actions include “aligning direct and indirect headcount to match capacity to sales demand profile through both temporary furloughs and permanent headcount reductions” and “curtailing discretionary spend”.
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The company declined to comment on how many people it would be letting go, but it seems likely that US workers will bear the brunt. Senior employs 6,600 people mainly in the US, UK, France and Germany. Its commercial aerospace division accounts for nearly half its business.
Its plants at Congleton and Macclesfield in Cheshire produce ducts and valves for fuel systems. It has a thermal engineering facility at Royston, Hertfordshire, while a factory at Earby in the Pennines produces machined components.
Senior said its civil aerospace division would not match in the second half the £16 million of profits that it made in the first half of the year. The division made £27 million of profit last year.