Boeing expects to increase deliveries of 737 Max narrowbodies from 31 per month to 38 by the end of the year, allowing it to maintain its projection of 400 to 450 annual deliveries of the troubled jet despite recently discovered production problems associated with Spirit Aerospace-supplied tail sections. Speaking during Boeing’s first-quarter earnings call on Wednesday, company CEO David Calhoun conceded that the problem will affect customers’ plans for airplanes they expected to arrive this summer but added that he has seen “steady progress” with the work required to resolve the quality issue.
Earlier this month, Spirit notified Boeing of what it called a nonstandard manufacturing process used during the installation of the fittings, creating the potential of noncompliance with required specifications. For Boeing, the most recent snag involving the Max again complicates its efforts to accelerate production, but Calhoun expressed optimism about a recovery later this year.
“Our team's been working hard over the last week,” said Calhoun. “The issue is understood. It's isolated to two specific fittings and we know what we have to do. The work will impact the timing of our deliveries over the next several months. However, we still expect to deliver 450 airplanes this year. Unfortunately, the timing of these delivery shortfalls will impact summer capacities for many of our customers, and we feel terrible about that.”
Meanwhile, supply-chain constraints continue to complicate Boeing’s effort to increase production to 38 and, ultimately, 50 of the narrowbodies per month by 2025 or 2026. Even so, Calhoun said, Boeing would not change its supplier master schedule to ensure those companies can keep pace once production accelerates.
“We're comfortable adding parts inventory,” noted Calhoun. “Stepping back, we appreciate that Spirit promptly notified us of this issue. They're an important partner for working closely on the recovery plan and we're working in a very constructive way.”
Calhoun explained that the defect does not present itself during visual inspection, meaning several of the airplanes entered service with customers before a Spirit employee discovered the problem. “It’s a gnarly defect,” he said. “In fact, it's impossible to visibly assess once the process is complete. So, without witnessing firsthand that process in action, you're not likely to find it from that point forward.
“I will celebrate the fact that an employee witnessed the procedure and raised his hand and said, ‘That doesn't look right.’ That is the only way that we would've ultimately found out about it. And I'm encouraging everybody in our supply chain if they see something of that sort to raise their hand.”