Boeing Co (BA.N) said on Wednesday that supply chain disruptions slowed production and deliveries of its 737 MAX cash cow narrowbody plane, but does not see its overall plan for the year being disrupted.
The U.S. planemaker also said China was close to clearing the 737 MAX to return to service, but progress with regulators and customers was delayed by stringent COVID protocols, not broader trade tensions between Washington and Beijing.
Boeing Chief Financial Officer Brian West told a Goldman Sachs conference it was grappling with shortages from multiple suppliers of a particular wiring connector, though overall the factory was primed to produce 31 jets monthly to plan.
“It’s a reflection of a crazy supply chain world that we live in right now,” West said. “It’s fairly localized and isolated, but we have options and we’re working them hard.”
“These things usually get resolved in a short time, and then we catch up and get movement,” he added.
The 737 MAX is vital to Boeing’s ability to emerge from the pandemic and the earlier grounding of the popular jet after fatal crashes.
China, one of the top aviation markets in the world, has been a holdout in clearing the 737 MAX to return to commercial service. Boeing sold a quarter of its jets to China before the grounding and the years-long tit-for-tat tariff war.
West said Boeing’s ability to raise 737 MAX production was more closely linked to the strength of the supply chain.
“With China, without China, there’s robust demand,” West said.
“We still want to make sure we’re very sensitive to that part of the world,” he added. But when Boeing raises production, “it will be a function of our confidence in our supply chain, not the demand signals.”
Source: Reuters
About Author
