SEATTLE (Reuters) – Since a crippling strike at several of Boeing Co’s U.S. aircraft plants ended more than a month ago, progress in ramping up production of its best-selling 737 MAX jet has been deliberately slow.
Safety inspectors inside the 737 MAX factory outside Seattle painstakingly inspected the semi-finished planes for defects they may have missed during the seven-week shutdown.
Other workers flocked to booklets to restore expired safety licenses. The plant was initially so lifeless in mid-November that one employee left early because the stabilization boxes he had been tasked with renovating were not being used, according to a source inside the plant.
The result: No new 737 MAX aircraft were completed. Boeing said on Tuesday that it had resumed Max production last week, as first reported by Reuters.
Boeing’s cautious approach, following criticism that the planemaker has been rushing production for years, has won praise from regulators and some airline CEOs.
But it also has some smaller suppliers who cut jobs or working hours during the strike, reluctant to increase staff again, creating more uncertainty in an already fragile supply chain, according to three suppliers, an analyst and an industry source.
Both Boeing and rival Airbus are struggling to meet production targets due to delays in the supply chain. Boeing CEO Kelly Ortberg told analysts in October that he expected a tough comeback from the supply chain strike after the strike.
One supplier told Reuters that parts that used to take one day to complete in the machining shop now take a week.
This report on Boeing’s efforts to resume production of its best-selling plane is based on interviews with dozens of Boeing factory workers and 10 suppliers, most of whom spoke on condition of anonymity because they were not authorized to speak to the media.
It appears Ortberg is sticking to his pledge to cautiously restart 737 MAX production, prioritizing safety and quality due to increased regulatory scrutiny after a panel exploded in the air in January on a nearly new plane.
The interviews also revealed that some suppliers are still struggling to recover from the strike, after suffering a decline in aircraft production during the Corona virus (Covid-19) crisis, and the grounding of the 2019 MAX model after two fatal accidents related to this model.
Boeing “will continue to steadily increase production as we execute our safety and quality plan and work to meet the expectations of our regulators and customers,” Boeing spokeswoman Jessica Kowal said. “We will also continue to work transparently with our suppliers, listen to concerns and look for opportunities to improve collaboration to ensure the entire production system operates safely and predictably.”
FAA in the factory
After weeks of inertia, new signs of movement emerged inside Boeing’s Renton 737 MAX factory last week, with the green fuselage entering the final assembly line where the wings and tail are attached, three sources said.
The restart, while not bringing immediate relief, is good news for cash-strapped fuselage supplier Spirit AeroSystems which was low on storage space during the strike. A Reuters reporter saw more than 100 MAX fuselages lined up at Spirit’s factory in Wichita this week.
Spirit Aero spokesman Joe Buccino said the company is “working closely with Boeing as we resume production.”
Boeing executives privately said they hoped to produce 15 to 20 MAX planes this month, two of the 10 suppliers and an industry source said, though one of them cautioned that the chance of reaching the upper end of that target was unlikely. A Boeing spokesman did not comment on these numbers.
Boeing usually closes most aircraft manufacturing operations between December 24 and January 1.
While Boeing has not disclosed production numbers, the planemaker said in October that it was preparing before the strike to reach a goal of 38,737 planes per month by the end of the year.
Daily tasks at the plant are coupled with painstaking efforts to clean up and take steps to avoid mistakes, with FAA officials regularly seen taking notes carrying writing pads and wearing reflective vests, they said.
FAA Administrator Mike Whitaker praised Boeing on Dec. 5 for not following previous practice by immediately restarting production after a strike, and instead focusing on workforce and training.
However, Whittaker told Reuters that Boeing has a long way to go to achieve the targeted safety culture. “The plant is cleaner, as you would expect, but they are upfront about the fact that they have a long way to go,” he said.
The stability of Boeing Max production is key for both the plane maker and the financial health of its supply chain for the aircraft with 4,200 pending flight orders that are expected to increase revenue for years to come.
Six of the 10 suppliers told Reuters they would not bring back workers before 2025, partly because they were unsure whether Boeing would need to change its production plans again.
Two suppliers said Boeing informed them that the planemaker is expected to provide a private update on a key 737 internal supply chain production milestone this month.
“Suppliers’ confidence in Boeing’s prices is at a low point,” said Glenn McDonald, a supply chain specialist at US consulting firm AeroDynamic, which advises clients in areas such as business and corporate strategy.
“Suppliers had previously been exhausted by investing at prices that did not come… This doubt became a self-fulfilling prophecy.”
Affected suppliers
In the short term, Boeing will likely rely on excess parts and components it collected this year to build its planes from then until the strike, as it largely continued to buy from suppliers at a higher rate than it needed because it was producing fewer planes because of the explosion. .
Buying then declined significantly during the strike. As production returns, supplier doubts about Boeing’s pricing could derail the investments needed to meet Boeing’s plans to return to a 38-and-above rate next year, according to three suppliers, McDonald and an industry source.
MacDonald said Boeing’s difficulties mean it will take longer to return 737 MAX production to pre-strike levels than it did after the 2008 work stoppage, when the planemaker returned to a monthly rate of 31 in about 25 days.
That longer recovery is being felt keenly by some of the hundreds of small suppliers dotting Boeing’s manufacturing heart in Washington state.
Small aerospace suppliers are less optimistic about making capital investments than many of their larger counterparts, said Christopher Chidzik, chief economist at the Manufacturing Technology Association, a trade group.
He said that in October, despite a strike by Boeing mechanics, aerospace producers increased manufacturing technology orders to the highest level in 2024, suggesting they used the downtime to replace and expand technology used on production lines.
Smaller recruitment shops are bucking that trend, he added.
Seattle-area supplier Rosemary Brister hoped she and her husband would be able to process the metal components of their planes more quickly after the strike ended, but delays persist.
The couple, who have run Hobart Machined Products since 1978 in a workshop next to their home, rely on a finishing specialist to anodize and paint their fine parts before sending them to larger companies that sell their products to Boeing.
This used to take a day, and now it takes a week, because the finishing specialist has been short-staffed since workers were laid off during the strike.
“All we can do is manufacture on our schedule, maybe speed up the parts and pay a little more to get them to our customers on time,” she said.
“Until I see some real stability, I’m not going to hire anyone,” Brister said.
The small supplier is ready to produce more specialized tools for its largest customers, said Carmen Evans, co-owner of New Tech Industries in Mukilteo, Wash., near Boeing’s massive Everett factory complex. But now they are in limbo as they wait for the Boeing MAX factory to start operating again.
“It’s not like the flood gates have opened yet,” she said.
(Reporting by Alison Lambert in Montreal and Dan Catchpole in Seattle; Additional reporting by David Shepardson in Washington; Editing by Joe Brock and Claudia Parsons)
