With airlines drastically reducing their flights and parking their aircraft, Everett’s large aircraft repair and maintenance firm ATS laid off about 150 workers Monday.
“We are fighting for our lives up here right now,” said CEO Matt Yerbic. “With the airlines in crisis, our work is at about 50% of where we thought we’d be in the next couple of weeks. It’s pretty ugly.”
Largely due to the Boeing production shutdown, Skills, which employs about 400 people at three facilities in Auburn doing machining and metal finishing work, is temporarily laying off 80% to 90% of them.
“We’ll have a skeleton crew over the next two weeks,” said Skills CEO Todd Dunnington. “We’re all just trying to adapt as best we can.”
These are some of the initial local impacts of the economic meltdown in the aviation industry brought on by the shutdowns needed to stop the spread of the coronavirus.
Boeing’s production halt has already spurred major partners to scale back across the country.
Like Boeing, Spirit AeroSystems of Wichita, Kan., has suspended production for two weeks while continuing to pay employees. GE Aviation, which supplies jet engines, is keeping its facilities open but laying off about 10% of its workforce, about 2,600 employees.
Meanwhile, the smaller aerospace companies in Washington state are scrambling to determine what they can do and which of their own suppliers and customers remain open.
ATS is one of the two large independent aircraft maintenance repair and overhaul firms left in the U.S., employing about 1,600 people nationwide, about 1,100 of those in Everett. It’s suffering directly from the dramatic airline downturn.
“Virtually every airline is parking planes,” said Yerbic. “We have airplanes landing right now at our property in Moses Lake to be stored indefinitely.”
He said ATS still has some work lined up for the next two weeks, but “after that it starts to really fall off.”
Yerbic said he’s taking no salary and has reduced all executive pay. He’s offering the state one of his large hangars at Paine Field as a depot for incoming medical relief supplies. He’s sent some technicians to a local group assembling ventilators.
But for his own company, “we don’t know what happens next,” he said.
“We are not able to sustain people with no work,” he said. And if the dire airline slump continues for months, he said, “our survival is in question.”
“This is our 50th year. I’m looking forward to being in our 51st. It’s a tough one right now,” Yerbic said.
Two of the state’s better-positioned aerospace companies — Janicki Industries of Sedro-Woolley and Electroimpact of Mukilteo, which design and build aerospace tooling and manufacturing equipment — are OK for now, but worried about a longer-term downturn.
Janicki, which employs about 700 people in Sedro-Woolley, currently has mostly defense and space contracts and no Boeing commercial jet work, said company president John Janicki. Firms doing defense work are classified as essential businesses and can remain open.
“We’re super fortunate,” said Janicki. “Today we have work to do. We have no layoffs at this point.”
“But it’s on a day-to-day basis,” he added. “We don’t know if our supply chain will be disrupted. We need raw materials. Carbon fiber. Big chunks of steel.”
And beyond that, because designing the tooling used to manufacture new airplanes is the biggest part of Janicki’s business, “Boeing’s health is a huge, huge worry,” he said.
He said it’s clear there will be no new Boeing airplane launched this year, but if such a project is pushed way out, “it’ll be very stressful for a bunch of companies, including us.”
At Electroimpact, also, although there are no immediate layoffs, the free fall at Boeing is the biggest concern.
“If they continue to tumble, that’s not good for our future,” said an engineer at the company, who asked for anonymity because he spoke without official authorization.
Electroimpact won huge contracts on Boeing’s 777X project that have provided plenty of work for the past few years. To secure its future, it needs Boeing to thrive and build another new jet.
Skills, a company with a social mission to provide work for people with disabilities — who make up about 60% of its workforce — has two lines of business in its aerospace manufacturing facilities: metal finishing of aluminum parts, and sheet metal fabrication and forming.
A lot of this work is delivered indirectly to Boeing, as Skills sends its product to other local machine shops that then ship finished parts to Boeing.
So like so many small local aerospace companies, its viability depends upon Boeing.
Banking on Boeing getting back to production as planned, CEO Dunnington said he hopes to bring people back from the temporary layoff in two weeks.