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Leonardo engages unions over ongoing Boeing Dreamliner production delays

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Leonardo engages unions over ongoing Boeing Dreamliner production delays
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Leonardo, an aerospace company based in Italy, plans to engage with its union concerning production challenges of the Boeing 787 at its Grottaglie site in Southern Italy. This decision comes amidst ongoing issues related to Boeing 787 production delays.

The Italian Union of Metalworkers (UILM) is set to meet with Leonardo’s management to discuss the future of the Grottaglie site. Leonardo’s Aerostructures division, which manufactures components for various aircraft including the Boeing 787, has been experiencing financial difficulties. As reported in Leonardo's nine-month financial results published on November 7, this division was the only segment operating at a loss, with an EBITA result of -€129 million ($136 million).

"37 fuselage sections and 25 stabilizers were delivered for the B787 programme (against 27 fuselage sections and 23 stabilizers in 2023)," stated Leonardo regarding its output.

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Tensions have risen following comments by Leonardo's CEO Roberto Cingolani during a presentation on third-quarter financial results. UILM criticized Cingolani’s remarks and expressed concern over potential plans to spin off the Aerostructures business due to Boeing's difficulties. The union argued that such plans would affect over 4,000 workers involved at Grottaglie.

"We are shocked by the statements made by Leonardo's CEO during the presentation of the 3rd quarter financial results! Leonardo is growing in terms of orders and results and wants to split the country by considering spinning off the Aerostructures business which is suffering from Boeing's difficulties," said UILM.

In response to these concerns, UILM announced a two-hour strike on November 11. Subsequently, a meeting between both parties on November 14 led Cingolani to clarify that there were no intentions to sell off the Aerostructures division but acknowledged restructuring was necessary.

The situation at Grottaglie reflects broader struggles within aerospace manufacturing. Spirit AeroSystems, another major supplier for Boeing, recently disclosed doubts about its ability to continue operations due to financial strains linked partly to "additional labor and supply chain cost growth on the B787 program."

On November 18, ULIM released a statement outlining discussions with Leonardo executives about diversifying activities at Grottaglie and establishing new divisions. However, concerns remain as Boeing reviews commitments under its Z61 plan affecting planned retirements for 2025.

Since July, workers at Grottaglie have been subjected to rolling furloughs due to reduced production demands for fuselage sections and horizontal stabilizers. These measures will persist until at least year-end as part of efforts to align production capacity with current requirements.

"The slowdown in the Boeing 787 production and delivery growth rate calls for this measure to temporarily align production capacity with the programme’s reduced short-term requirements," according to a statement from Leonardo.

Despite these challenges, Leonardo maintains confidence in the Boeing 787 program as a market leader for medium-to-large passenger aircraft.

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