Inside Boeing’s renewed effort to build its best-selling plane

Inside Boeing’s struggle to make its best-selling plane again

2024-12-12 16:31:52 :

Boeing very slow to ramp up 737 MAX production after strike

More than a month after strike, MAX production begins

Suppliers reluctant to hire employees who are furloughed during strike

Author: Alison Lambert, Dan Catchpole

SEATTLE, Dec 12 (Reuters) – Boeing’s production of its best-selling 737 MAX jet has been deliberately slow since a crippling strike at several U.S. aircraft plants ended more than a month ago.

Safety inspectors at the 737 MAX factory outside Seattle painstakingly inspected half-finished planes, looking for flaws they might have missed during the seven-week shutdown.

Other workers thumbed through manuals to reinstate expired safety permits. In mid-November, the plant started out so sleepy that one employee left early because the fastener bins he was responsible for replenishing were not being used, according to sources inside the plant. The upshot: the new 737 MAX planes aren’t even finished yet. Boeing said on Tuesday it restarted MAX production last week, Reuters reported.

Boeing has been criticized for years for rushing production, but the company’s cautious approach has won praise from regulators and some airline CEOs.

But three suppliers, an analyst and an industry source said that some smaller suppliers had laid off workers or cut operating hours during the strike and were hesitant to add more staff, adding to already fragile supply chains. Comes further uncertainty. Boeing and rival Airbus have struggled to meet production targets due to supply chain delays. Boeing CEO Kelly Ortberg told analysts in October that he expected a bumpy return for the supply chain after the strike.

Parts that used to take a day to complete in a job shop now take just a week, one supplier told Reuters.

The account of Boeing’s efforts to restart production of its best-selling jet is based on interviews with more than a dozen Boeing factory workers and 10 suppliers, most of whom spoke on condition of anonymity because they were not authorized to speak to the media. chat.

It’s a sign that Ortberg is sticking to his promise to cautiously restart 737 MAX production and prioritize safety and quality as regulatory scrutiny intensifies following an in-flight panel explosion on a nearly new plane in January.

The interview also revealed that some suppliers are still trying to recover from the strike, after battling a decline in aircraft production during the COVID-19 pandemic and the grounding of the 2019 MAX due to two fatal crashes.

Boeing “will continue to steadily increase production, execute our safety and quality programs, and work to meet regulatory and customer expectations,” Boeing spokesperson Jessica Koval said. “We will also continue to work transparently with our suppliers. , listen to concerns and look for opportunities to improve collaboration to ensure our entire production system operates safely and predictably.”

After weeks of stagnation, there were new signs of movement inside Boeing’s Renton 737 MAX factory last week, three sources said, as green fuselages entered the final assembly line where the wings and tail are installed.

The restart, while not an immediate relief, is good news for financially troubled airframe supplier Spirit AeroSystems, which ran out of storage space during the strike. A Reuters reporter saw more than 100 MAX fuselages lined up in a row at Spirit’s Wichita plant this week.

Spirit Aero spokesman Joe Buccino said the company is “working closely with Boeing as we restart production.” Boeing executives have privately said they hope to produce 15 to 20 MAX jets this month, two of the 10 suppliers and an industry source said, but one warned of the high-end odds of achieving that goal. Not very sexual. A Boeing spokesman did not comment on the figures.

Boeing typically shuts down most of its aircraft manufacturing operations from December 24 to January 1.

While Boeing does not disclose production figures, the planemaker said in October, before the strike, that it was preparing to hit a monthly production target of 38,737 planes by the end of the year.

At the plant, daily tasks come with rigorous cleanup and steps to avoid mistakes, with FAA officers often taking notes while holding clipboards and wearing reflective vests, they said.

FAA Administrator Mike Whitaker on Dec. 5 praised Boeing for not following past practice of immediately resuming production after strikes and instead focusing on workforce and training. Still, Whitaker told Reuters Boeing still has a long way to go to achieve its target safety culture. “As you would expect, the factory is cleaner, but they frankly admit they still have a long way to go,” he said.

Stabilizing Boeing MAX production is critical to the financial health of the planemaker and its aircraft supply chain, with the plane having 4,200 backlog airline orders expected to drive revenue growth in the coming years.

Six of 10 suppliers told Reuters they would not recall workers before 2025, in part because they were unsure whether Boeing would need to change its production plans again.

Two suppliers said Boeing told them the planemaker expected to privately update the supply chain this month on key 737 supply chain production milestones.

“Supplier trust in Boeing’s price is very low,” said Glenn McDonald, a supply chain expert at AeroDynamic Advisory, a US aerospace consultancy that advises clients on areas such as commercial and corporate strategy. .

“Suppliers have previously suffered losses from investments at unrealized rates…the suspicion became a self-fulfilling prophecy.”

In the short term, Boeing will likely rely on a surplus of parts it has built up this year to build planes. Until the strike, the company had largely continued to buy from suppliers at a higher rate than needed because of the blowout, which it was producing. There are fewer planes. Subsequently, purchasing fell sharply during the strike. Supplier skepticism about Boeing’s rates as production returns to normal could hamper investments needed for Boeing’s plan to return to rates of 38% and above next year, according to three suppliers, McDonald and an industry source.

McDonald said Boeing’s woes mean returning 737 MAX production to pre-strike levels will take longer than it did after the 2008 shutdown, when the planemaker returned to 31 planes a month in about 25 days.

The longer recovery period is being keenly felt by some of the hundreds of small suppliers spread across Boeing’s manufacturing heartland in Washington state. Smaller aerospace suppliers are less optimistic about capital investment than many of their larger peers, said Christopher Chidzik, chief economist at the Manufacturing Technology Association, a trade group.

In October, aerospace producers increased orders for manufacturing technology to their highest level in 2024 despite a strike by Boeing machinists, suggesting they are using the downtime to replace and expand technology used on production lines, he said.

Smaller job shops buck that trend, he added.

Seattle-area supplier Rosemary Brest hopes she and her husband will be able to machine metal aircraft parts more quickly after the strike ends, but delays persist.

The couple, who have run Hobart Machine Products out of a workshop next to their home since 1978, rely on finishing experts to anodize and paint their precision parts before sending them to large companies that sell to Boeing. company.

What used to take a day now takes a week because finishing specialists have been short-staffed since workers were laid off during a strike.

“All we can do is produce within the schedule we have, maybe speed up the parts and pay more to get them to our customers on time,” she said.

“I’m not going to hire anyone until I see real stability,” Brest said.

Carmen Evans is a partner at New Tech Industries in Mukilteo, Wash., near Boeing’s Everett plant. He said the small supplier is ready to produce more specialized tools for its largest customer. But they are now stuck in a limbo, waiting for Boeing’s MAX factories to start running again.

“The floodgates haven’t opened yet,” she said. (Reporting by Alison Lambert in Montreal and Dan Catchpole in Seattle; Additional reporting by David Shepherdson in Washington; Editing by Joe Bullock and Claudia Parsons)

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