Boeing is telling suppliers to keep the parts for its planes coming as fast as possible
Beleaguered manufacturer Boeing $BA needs to put together airplanes and send them to airlines. But ever since one of those planes lost a piece of its fuselage mid-flight in January, it hasn’t been able to put together planes as quickly as it or those airlines would like. But it’s still telling suppliers to keep the parts for those planes coming as fast as possible.
“Boeing’s message to the supply chain [is] keep your foot on the gas and keep to the master schedule of production plan,” said Chris Zimmer, CEO of specialized steel producer United Stainless & Alloyed Products (USAP), on that company’s earnings call Wednesday. “Boeing is intent on ensuring supplier stability and allowing all suppliers to catch up and preparation for the increase in build rates planned for 2025 and 2026.”
The planemaker had been hoping to crank out 38 of its 737 Max planes every month and ramp things up from there, but Zimmer said Boeing is having trouble hitting even that mark as the Federal Aviation Administration increases its scrutiny of the company’s quality control and safety processes with more “boots on the ground.”
Boeing expects to eventually return to its prior production level sometime in the second half of the year. For now USAP is feeling good about Boeing’s demand for its products. But if Boeing can’t speed things up later this year, things might start looking gloomier.
“I believe that if we go out beyond the late June-July time period and they don’t have resolution with the FAA to get back on track going beyond the 38-per-month rate, I think at that point we need to reassess what the the environment looks like,” Zimmer said.
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