Citing the effects of the nationwide COVID-19 pandemic, Howmet Aerospace Inc. recently issued a wave of layoffs at its facility in Whitehall that affected 625 of its more than 2,000 local employees.
In a filing to the state, representatives for Pittsburgh, Pa.-based Howmet Aerospace (NYSE: HWM) said the company was forced to permanently lay off 306 employees between April 3 and May 31 of this year, during the thick of a pandemic that forced statewide shutdowns throughout the country and ravaged the airline industry.
Coinciding with the permanent layoffs, 319 employees at Howmet’s Whitehall facility in Muskegon County — which casts components for jet engines — exercised their right under the collective bargaining agreement to take voluntary layoffs. Those temporary layoffs, however, “may become permanent, due to business circumstances the company could not reasonably foresee in the form of a sudden and recent reduction in customer orders related to the COVID-19 pandemic,” Howmet Human Resources Director Amy Heisser said in the filing.
Howmet spokesperson Paul Erwin told MiBiz "we can't really say at this point" whether the 319 temporary layoffs will be permanent.
While the layoffs might be massive, they hardly come as a surprise.
Similar to other members of the aerospace industry supply chain, Pittsburgh-based Howmet Aerospace, which spun off of Arconic Inc. (now Arconic Corp.) at the beginning of April, was profoundly affected by not only the COVID-19 pandemic that decimated the airline industry, but also the grounding of the Boeing 737 Max. The aircraft’s reentry into the market continues to see delays.
In February 2020, the company told analysts that it expected to lose $400 million in sales because of the Boeing crisis alone and could cut jobs this year as a result.
In the first quarter of 2020, Howmet’s revenues slid 9 percent to $3.2 billion, and the company announced a series of cost-cutting measures, including suspending dividends, aimed at saving approximately $100 million. Howmet also pulled back on capital expenditures by a third for 2020.
“The first wave of cost reductions has already been implemented as we focus on cost efficiency and cash conservation in light of the continuing turmoil in commercial aviation and aerospace,” Howmet Executive Chairman and Co-CEO John Plant said in an April earnings statement.
Howmet also has not been alone in seeking layoffs: GE Aviation President and CEO David Joyce laid out a plan in May for a 25-percent permanent reduction to the company’s global employee base of about 52,000 people.
As of May, it was still not clear if, and how, that would affect the 1,000 employees working for GE Aviation in Grand Rapids.
MiBiz Managing Editor Andy Balaskovitz contributed to this report.
EDITOR’S NOTE: This story has been updated with comment from a company spokesperson.