Boeing (NYSE: BA) has told suppliers it is delaying a key production milestone for its 737 MAX by six months, three industry sources said, in a sign the planemaker is struggling to boost production of its best-selling jet.
Boeing’s latest 737 supplier master schedule communicated to the industry calls for MAX output to reach 42 a month in March 2025, compared with a previous target of September 2024, the sources told Reuters.
Boeing has been struggling to recover production of its top single-aisle passenger plane due to additional safety and regulatory checks since a door panel dramatically flew off a 737 MAX jet in midair in January.
While the so-called master schedule is a demand signal, it is not an official production target. Boeing (NYSE: BA) has not changed its official plane production target, which calls for 38 MAX jets a month by the end of 2024, up from roughly 25 jets a month in July.
When asked about the master schedule, a Boeing spokesperson directed Reuters to second-quarter comments made by CFO Brian West in late July.
“On the master schedule, we continue to make adjustments as needed and manage supplier by supplier based on inventory levels,” West said. “Our objective remains to keep the supply chain paced ahead of final assembly to support stability.”
To align with Boeing’s lower production, supplier Spirit AeroSystems in August temporarily lowered its monthly output of fuselages for the 737 MAX to 21 a month from 31, reducing demand for parts from its own supply chain, a senior industry source told Reuters.
Spirit AeroSystems (NYSE: SPR) spokesperson Joe Buccino said, “We make adjustments of delivery and production rates with our suppliers per our supplier agreements.”
Two of the sources, who work for suppliers, said Boeing’s changes to the internal target have made it harder for them to forecast and plan production.
Effectively managing suppliers is key for both Boeing (NYSE: BA) and rival Airbus, which both want to grow output to meet travel demand.
In a separate move, Boeing Commercial Airplanes is taking steps to combine its operations and contracts teams in an internal organizational change expected to improve communication between suppliers and the planemaker, said one of the sources. Boeing declined to comment.
(Source: ReutersReuters)
