Boeing Tells Supplier To Halt Production Of Certain Parts and Planes


Boeing recently instructed its largest supplier to stop making parts for four MAX jets and hold off on starting 16 more.

Boeing has recently instructed its largest supplier, Spirit AeroSystems Holdings, to halt production of parts for 737 MAX in response to a lack of demand posed by the pandemic, according to a report by The Wall Street Journal.

More specifically, Boeing called on the company to hold on their efforts for part-making for four MAX jets and the start of 16 other planes. They have continued production of the 737 but have instructed Spirit AeroSystems Holdings to hold off on any work beyond that.

“To reflect the slower ramp and align our supply inventories, we’re working closely with our suppliers to adjust delivery schedules and rate profiles as appropriate,” said a Boeing spokesman.

Executives are continuing to dispute over showcasing new planes or holding the older ones as the pandemic continues to impact demand in the business. Boeing has delivered only 60 jets this year.

Boeing stopped MAX production in January after the production of about 450 planes and delivery of more than 380. Those planes were not in use due to two fatal crashes. The MAX could be approved to begin flying passengers in the U.S. by the fall.

This week, Boeing issued a service bulletin outlining how to relocate certain wiring in the MAX fuselages to avoid short-circuits as well as guidelines on revised training standards. The changes are waiting vetting and approval from the Federal Aviation Administration as well as from a group of international regulators and commercial pilots.

Boeing’s shares were recently down about 11% and Spirit AeroSystems’ were down around 13%. Both shares have increased dramatically in recent weeks due to the reopening of economies and plans to resume flight departures.

However, assumed production of the MAX jets still remain lower than originally anticipated. Boeing has continued to pay suppliers in the event of any changes to demand.

Read the full report here.


Economics, Finance and Investing