By Alison Lambert and Rajesh Kumar Singh
MONTREAL/CHICAGO (Reuters) – Canada’s Mitchell Aerospace is enjoying a booming business – and a shortage of store floors reverberates from Boeing (NYSE::) to Airbus. The Montreal-based aircraft parts supplier has a backlog of orders from customers like Raytheon Technologies (NYSE:), as aircraft makers push to ramp up production after a two-year slump. Like other companies that provide precision cast parts for everything from landing gear to engine components, Mitchell Aerospace is facing a labor shortage expected to hamper aircraft production through 2023.
“It’s just a hurricane in the factory,” said company president Guillermo Alonso. “There is no time. It’s just producing, producing, producing and finding ways to improve your productivity.”
A slowing global economy is beginning to resolve some of the supply chain deficiencies that have hurt manufacturers and contributed to inflation. Demand for freight and air freight slumped, chip sales slowed, and prices for used cars in the United States fell.
But aircraft parts makers are still suffering from the deep job cuts that were made when planes have been grounded during the pandemic, in a sign of how uneven the supply chain crisis has become.
In the United States, space employment is 8.4% below the pre-pandemic level. In Quebec province, where Mitchell is located, the industry needs to fill 38,000 jobs in the next decade, according to industrial trade group Aero Montreal. Major casting makers such as Berkshire Hathaway (NYSE 🙂 Inc’s Precision Castparts Corp and Pittsburgh-based Howmet Aerospace, which supplies Boeing, Airbus and General Electric (NYSE:), hiring takes place after downsizing in 2020. But it takes time to train new employees. Boeing CEO David Calhoun has warned that employment will remain a bottleneck for the industry for years. “I don’t expect this to be resolved any time soon,” Calhoun told an American Chamber of Commerce conference this month. The problem is exacerbated by the labor-intensive casting industry that is difficult to automate. In a recent survey by Jefferies, nearly three-quarters of aerospace equipment makers cited castings as the biggest source of imperfection. Privately owned Mitchell Aerospace encourages employees to work overtime, raise wages by 4.75%, and offer worker referral bonuses. It is also trying to recruit more women, immigrants and refugees from Ukraine. Some casting suppliers take up to 72 weeks to fill orders, said David Wehrman, managing director at AlixPartners. He said higher interest rates and growing economic uncertainty were making companies worried about increasing production capacity, given concerns that demand could collapse. “It’s going to be a tough time for a long time.” ‘All that work’ Meanwhile, the struggle to find workers across the supply chain is reeling, delaying production of jet engines and aircraft at a time when much of the air travel market is booming. Leesta Industries, a customer of Mitchell, also struggles with delays and quality problems from a different casting product. President Ernie Staub said that when that product is a month late for delivery, Montreal-based Leesta, which makes engine components and landing gear, must adjust to its own deadlines. “The actual delivery lead time for your product is hit by a month,” he said. “You have to be ahead of the rest of your work.” Raytheon (NYSE::) said recently that limited supplies of castings have left it running “hand-to-mouth,” warning that delivery of some large Pratt & Whitney commercial engines could slip in the first quarter of 2023. The company did not specify the previous schedule. for delivery.
Rival GE said a lack of supplies made it difficult to deliver the engines on time. Their customers are upset. Airbus’ production target has fallen, while Boeing has warned that supply chain stresses have limited its ability to ramp up production. Mitchell’s factory in Montreal begins to buzz before sunrise with workers in protective gear filling mold sections with a mixture of fine sand and bonding agent. The buzzing and grinding stops by mid afternoon with no workers for a second shift.
“It’s all labour,” said Alonso, who is looking for shop workers and metallurgists. We have a request.
Mitchell can only pass on about half of the higher costs to customers. Alonso said automating part of Mitchell’s sand casting production by next year could address some of the labor issues, rising costs, and allow for growth.
He sees robots replacing the job in which a worker must remove debris from castings. Work is repetitive and the part is at risk of damage during operation.
“We haven’t hit the investment trigger yet, but it’s a necessity,” Alonso said.