As commercial aircraft manufacturer Boeing continues to address returning the beleaguered 737 MAX to global operational service, a report indicates that the manufacturer is reaching out to suppliers for added resource support.
The Wall Street Journal reported last week that the company is proactively reaching out to its network of 600 prime suppliers to both prepare for eventual restarting of 737 MAX monthly production, and according to the report, “dissuade some from seeking more business from Airbus SE.”
At the time of the aircraft’s grounding, suppliers had ramped-up to support Boeing’s targeted single-aisle production rate of 57 aircraft per month. According to the report, most suppliers have weathered the overall production cutbacks and outright suspension in January. However, when production is re-started, some industry watchers believe it could take an additional three years to again reach that former 57 per month level.
This reach-out effort is headed by Boeing’s recently appointed new head of the Commercial Airplanes business unit, and reportedly some of the $4 billion set aside for 737 MAX crisis needs is being earmarked for cash advances for certain suppliers in need of financial liquidity. Reportedly not included in this supplier reach out is any easing of the supplier payment terms outlined in the loosely named 2012 Partnering for Success supplier payments program which can at times delay payments to suppliers for up to 90 days.
The obvious concern is the loss of a highly skilled and experience supplier workforce, or the reallocation of that workforce to the ongoing production ramp-up needs of rival Airbus.
A further noted concern is whether suppliers will participate in the next Boeing aircraft development program destined to a single aisle, longer range aircraft to compete with the recently announced and initially popular Airbus A321 ER aircraft.
Critical suppliers such as aircraft fuselage and components producer SpritAerosystems, and aircraft engine provider GE Aerospace and Safran has already inked modified supply agreements for 2020 production needs, but a lower monthly production support levels.
Completing Stored Aircraft Inventory Delivery Could Take Years
Industry publication Aviation Week reported earlier this month that a widely followed industry consultant as indicating that it could take as much as two years to complete delivery of the up to 400 completed by undelivered 737 MAX aircraft being stored at various airports and storage facilities.
That report indicates that in addition to the overall logistics required for preparing the 387 operationally grounded aircraft to be updated with new flight control software and required modifications before returning into operational services, there will be additional lags in actual delivering the upwards of 400 completed aircraft being stored at numerous airport storage sites.
Airline deliveries of the latter category are dependent on pilots having to undergo required added simulator training, and on the aircraft being retrofitted for new flight control software, along with new identified issues being identified by government air regulators.
Newly discovered design and manufacturing glitches include potential relocation of a tail wiring harness, inspecting and fixing a metallic lining that shields as protection against aircraft lightning strikes, and reports of debris in fuel tanks in up to two-thirds of previously newly produced aircraft. The latest estimate is that it will be October before various global air carriers actually begin to take delivery of their new 737 MAX aircraft, well beyond the summer travel peak period.
The one firm aspect of Boeing’s ongoing 737 MAX corporate crisis is that included in newly appointed CEO Dave Calhoun’s $7 million performance-based incentives is the milestone of worldwide regulatory clearance of the MAX including the upwards of 800 aircraft still grounded. If the delivery and return to operational service, along with a half-dozen of other listed milestones are not deemed substantially advanced by the end of 2023, than the bonus is forfeited in the entirety.
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