Finance
Inside Boeing’s struggle to make its best-selling plane again
Published by Global Banking & Finance Review®
Posted on December 12, 2024
7 min readLast updated: January 27, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 12, 2024
7 min readLast updated: January 27, 2026
Boeing resumes 737 MAX production with a focus on safety and quality, facing supply chain challenges post-strike.
By Allison Lampert and Dan Catchpole
SEATTLE (Reuters) - Since a crippling strike at many of Boeing's U.S. plane factories ended more than a month ago, progress ramping up production of its best-selling 737 MAX jet has been deliberately slow.
Safety inspectors inside the 737 MAX factory outside Seattle laboriously scoured half-constructed planes for flaws they may have missed during the seven-week work stoppage.
Other workers poured over manuals to restore their expired safety licenses. The factory was initially so lifeless in mid-November that one employee left early because the bins of fasteners he was tasked with replenishing weren't being used, according to a source inside the plant.
The result: no new 737 MAX plane has been completed. Boeing said on Tuesday that it had restarted MAX production last week, as first reported by Reuters.
Boeing's cautious approach, following criticism that the planemaker for years rushed production, has garnered praise from regulators and some airline CEOs.
But it also has some smaller suppliers who cut jobs or operating hours during the strike hesitating to staff-up again, creating further uncertainty in an already fragile supply chain, according to three suppliers, one analyst and an industry source.
Both Boeing and rival Airbus have struggled to meet production goals due to supply chain delays. Boeing CEO Kelly Ortberg in October told analysts he was anticipating a bumpy return from the supply chain post strike.
Parts that used to take a day to be finished at a processing shop now take a week, one supplier told Reuters.
This account of Boeing's effort to restart production of its strongest-selling jet is based on interviews with a dozen Boeing factory workers and 10 suppliers, most of whom spoke on condition of anonymity because they are not authorized to talk to the media.
It shows that Ortberg is sticking to his pledge to cautiously restart 737 MAX production, prioritizing safety and quality due to heightened regulatory scrutiny following a January mid-air panel blowout on a near-new plane.
The interviews also revealed that some suppliers are still struggling to recover from the strike, after wrestling with slumping plane production during COVID-19, and the 2019 MAX grounding following two fatal crashes involving the model.
Boeing "will continue to steadily increase production as we execute on our safety and quality plan and work to meet the expectations of our regulator and customers," Boeing spokesperson Jessica Kowal said. "We will also continue to work transparently with our suppliers, listening to concerns and looking for opportunities to improve collaboration to ensure our entire production system operates safely and predictably.”
FAA IN THE FACTORY
After weeks of inertia, there were fresh signs of movement inside Boeing's Renton 737 MAX factory last week, three sources said, with green fuselages entering the final assembly line where the wings and tail get attached.
The restart, while not bringing immediate relief, is good news for financially-strapped fuselage supplier Spirit AeroSystems which was running low on storage space during the strike. A Reuters reporter saw over 100 MAX fuselages lined up at Spirit's Wichita factory this week.
Spirit Aero spokesperson Joe Buccino said the company was "working closely with Boeing as they restart production."
Boeing executives have privately said they hope to produce 15 to 20 MAX jets this month, two of the 10 suppliers and one industry source said, although one of them cautioned that the chance of hitting the higher end of that target is unlikely. The Boeing spokesperson did not comment on those numbers.
Boeing typically closes most planemaking operations between Dec 24 and January 1.
While Boeing doesn't disclose production figures, the planemaker said in October that before the strike it was preparing to hit a target of 38 737 jets per month by year's end.
At the factory, daily tasks are paired with exacting efforts to clean up and take steps to avoid error, with note-taking FAA officials carrying clipboards and donning reflective vests a regular sight, they said.
FAA Administrator Mike Whitaker praised Boeing on Dec 5 for not following past practice by immediately restarting production after the strike, instead focusing on workforce and training.
Still, Whitaker told Reuters that Boeing has a long journey to achieve its targeted safety culture. "The plant's cleaner, as you would expect, but they're frank about the fact that they've got a long way to go," he said.
Stabilizing Boeing's MAX production is key both for the planemaker and for the financial health of its supply chain on the jet with 4,200 outstanding airline orders and which is expected to drive revenues for years to come
Six out of the 10 suppliers told Reuters they won’t bring back workers before 2025, partly because they are unsure whether Boeing will need to again change its production plans.
Two suppliers said they were told by Boeing that the planemaker is expected to give a private update on a key internal 737 supply chain production milestone for the supply chain, this month.
"Supplier trust in Boeing rates is at a low point," said Glenn McDonald, a supply chain specialist at U.S. aerospace consultancy AeroDynamic Advisory, which advises clients in areas like business and corporate strategy.
"Suppliers have been burned before by investing for rates that didn’t come ... that doubt becomes a self-fulfilling prophecy."
BRUISED SUPPLIERS
In the short term, Boeing can likely count on excess parts and components it has amassed this year to build its planes since until the strike it largely continued purchasing from suppliers at a higher rate than it needed because it was producing fewer jets due to the blowout.
Then, purchasing largely slumped during the strike. As production comes back online, supplier skepticism over Boeing's rates could impede needed investments to meet Boeing's plans for a return to a rate of 38 and above next year, according to three suppliers, McDonald and an industry source.
Boeing's struggles mean it will take longer to return 737 MAX production to its pre-strike levels than after a 2008 work stoppage, when the planemaker got back to a monthly rate of 31 in about 25 days, McDonald said.
That longer recovery is being acutely felt by some of the hundreds of small suppliers that dot Boeing's manufacturing heartland in Washington state.
Smaller aerospace suppliers are less bullish on making capital investments than many of their larger counterparts, said Christopher Chidzik, principal economist at the Association for Manufacturing Technology, a trade group.
In October, despite the Boeing machinists strike, aerospace producers increased orders of manufacturing technology to the highest level of 2024, indicating that they used the downtime to replace and expand technology used on production lines, he said.
Smaller job shops went against that trend, he added.
Seattle-area supplier Rosemary Brester hoped she and her husband would be able to get their metal aircraft components processed more quickly following the end of the strike, but delays persist.
The couple, who have been running Hobart Machined Products since 1978 out of a workshop beside their home, rely on a finishing specialist to anodize and paint their precision parts before sending them to larger companies that sell to Boeing.
This used to take a day, now it takes a week, because the finishing specialist has been short-staffed since laying off workers during the strike.
"All we can do is manufacture to the schedule we have, maybe expedite parts and pay a bit more to get them to our customers on time," she said.
"Until I see some real stability, I'm not going to hire anybody," Brester said.
Carmen Evans, co-owner of New Tech Industries in Mukilteo, Washington near Boeing's colossal Everett factory complex, said the small supplier is ready to produce more specialized tooling for its largest customer. But they are now in a type of limbo as they wait for Boeing's MAX factory to start humming again.
"It's not like the floodgates have opened up yet," she said.
(Reporting By Allison Lampert in Montreal, Dan Catchpole in Seattle; Additional reporting by David Shepardson in Washington; Editing by Joe Brock and Claudia Parsons)
The article discusses Boeing's cautious restart of 737 MAX production, prioritizing safety and quality amid supply chain challenges.
Boeing is deliberately taking a slow approach to ensure safety and quality, following criticism of rushed production in the past.
Suppliers face uncertainty and challenges in staffing due to the slow production ramp-up and previous strike impacts.
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