(Reuters) -Spirit AeroSystems on Thursday will suspend factory production at its plant in Wichita, Kansas, the company said, after workers rejected a proposed four-year deal and announced a strike to begin on June 24.
Spirit will suspend factory production prior to the expiration of its contract with the International Association of Machinists and Aerospace Workers (IAM) which ends on June 24, it said.
“We are disappointed that our employees represented by the IAM rejected our four-year contract offer and voted to strike,” Spirit said. “Despite this setback, we are not distracted from the task at hand. We look forward to continued meetings with IAM leadership.”
Starting on June 22, all IAM-represented employees will not report for work but will receive pay for their regularly scheduled work hours, the company said. However, workers not represented by union should report to work on Thursday, it added.
Workers at the plant, which makes critical structures for Boeing jetliners, will go on strike on Saturday, after rejecting a proposed four-year deal on Wednesday night, the IAM said.
About 6,000 members of the IAM voted to reject Spirit’s “last best and final offer,” with a strike scheduled to begin at 12:01 a.m. CDT (0501 GMT) on June 24, the union said.
“The IAM’s dedicated and hardworking membership at Spirit AeroSystems has worked without fail during tumultuous times, including a pandemic that saw everything grind to a halt. Most of our members have concluded that the company’s offer is unacceptable,” IAM said in a statement.
IAM and Spirit reached a tentative agreement last week that included additional health insurance and retirement benefits, made overtime on Sunday voluntary, and provided for up to a compounded 34% average pay increase over four years.
The union said it would regroup and begin planning “the following steps to bring the company back to the table.”
Boeing did not immediately respond to a request for comment.
The Wichita production facility manufactures major subassemblies of most Boeing jetliners, including the entire fuselage of Boeing’s lucrative 737 narrowbody aircraft and the forward fuselage of the widebody 787 Dreamliner.
Last month, Spirit said it expected to take a $31 million hit to its full-year gross profit from disruptions related to 737 MAX fuselages and took a $110 million loss in reach-forward charges on Airbus and Boeing jet production in the first-quarter.
(Reporting by Valerie Insinna in Washington and Abinaya Vijayaraghavan, Shivansh Tiwary in Bengaluru; editing by Gerry Doyle and Jason Neely)
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