Boeing is switching subcontractors at a facility that paints its jets in Portland, Ore., resulting in layoff notices to all 186 workers there. The new French operator of the specialized facility may rehire many of those laid off, but possibly at reduced rates of pay or benefits.
In line with its aggressive drive to squeeze costs out of its supply chain, Boeing is switching subcontractors at a facility that paints its jets in Portland, Ore.
Current subcontractor Commercial Aircraft Painting Services (CAPS) issued layoff notices Dec. 1 to all its 186 workers.
French company Finaero, which is headquartered in Toulouse and paints jets for Airbus, will take over the facility at the end of January and will likely rehire a significant portion of that highly specialized workforce — though possibly with lower wages or benefits.
Boeing owns the facility, which consists of two hangars at Portland International Airport. Because its Everett paint shop cannot handle all the widebody jets built there, Boeing uses the Portland hangars as an overflow paint operation.
Most Read Business Stories
- Kirkland consultant questioned for six hours in criminal probe of Boeing 737 MAX crashes
- ‘We had executional misses’ — Nordstrom reports decline in profits and sales
- Blue Apron latest to suffer in tough meal kit market
- Supreme Court rejects UPS on Postal Service delivery prices
- Tesla reduces prices on Models S and X amid stock slump
The facility is CAPS’s sole location and the company is therefore going out of business, said its owner and president, Paul Lubomirski.
Lubomirski said CAPS paints anywhere from three to seven widebody airplanes per month, depending on the overflow needs from Everett. He said when CAPS moves out at the end of January there’ll be a transition period until Finaero re-starts the operation.
“This operation is really important to Boeing,” Lubomirski said. “It’s in everyone’s interest to get the hangars back in production as soon as possible.”
CAPS has had the Boeing contract for the past five years. Workers there voted in July to join the International Association of Machinists (IAM) union, Local Lodge No. 63, which also represents more than 1,200 Boeing employees in Portland.
Boeing spokesman Doug Alder said the unionization was not a factor in CAPS losing the contract.
When the contract with CAPS expired this year, the company failed to agree on pricing terms for renewal and Boeing put the work out to bid, he said.
Alder said the jetmaker “had a good working relationship with CAPS,” but “we were unable to reach agreement on a long-term contract.”
“To meet our customer commitments and affordability targets, it became necessary to compete the contract through an open bidding process,” Alder said.
He added that the talks with CAPS over a new contract ended in June, “several weeks before we were even informed that a union vote was going to being called.”
CAPS is the latest casualty in Boeing’s intense push to lower costs, which has seen it switch from several longtime suppliers to others who can produce the savings the jetmaker is looking for.
Finaero “underbid us, so obviously their cost structure is going to be different than ours,” said CAPS president Lubomirski.
Boeing’s Alder said Finaero is “working with CAPS management to retain as many of their employees as possible.”
“Hiring fairs are scheduled to provide those employees with opportunities for continued employment,” he added.
Britt Cornman, IAM Local 63 acting directing business representative, said the CAPS workforce has very specialized skills and that if Finaero hires back more than half of the 147 workers in the bargaining unit, it will be obligated to negotiate a contract with the IAM.
He said the union has had no contact yet with Finaero management.