By Allison Lampert
(Reuters) -Boeing has told suppliers it is delaying a key production milestone for its 737 MAX by six months, three industry sources said, in a sign that the planemaker is struggling to ramp up production of its best-selling plane.
Boeing (NYSE:)’s latest 737 supplier master schedule communicated to the industry that MAX production should reach 42 per month by March 2025, compared to an earlier target of September 2024, the sources told Reuters.
Boeing has struggled to restore production of its top single-aisle passenger jet due to extra safety and regulatory checks since a door panel dramatically blew off a 737 MAX plane in January.
Although the so-called master schedule is a demand signal, it is not an official production target. Boeing has not changed its official aircraft production target, which expects 38 MAX jets per month by the end of 2024, down from about 25 jets per month in July.
When asked about the headline schedule, a Boeing spokesperson referred Reuters to CFO Brian West’s second-quarter comments in late July.
“Under the master schedule, we continue to make adjustments as necessary and manage supplier by supplier based on inventory levels,” West said. “Our goal remains to keep the supply chain moving prior to final assembly to support stability.”
In an effort to adjust to Boeing’s lower production, supplier Spirit AeroSystems (NYSE:) temporarily reduced its monthly production of fuselages for the 737 MAX from 31 to 21 per month in August, reducing demand for parts from its own supply chain , an important sector in the industry, declined. source told Reuters.
Spirit AeroSystems spokesman Joe Buccino said “we are adjusting supply and production rates with our suppliers in accordance with our supplier agreements.”
Two of the sources, who work for suppliers, said Boeing’s changes to its internal target have made it more difficult for them to predict and plan production.
Managing suppliers effectively is critical for both Boeing and rival Airbus, both of which are looking to increase production to meet travel demand.
In a separate move, Boeing Commercial Airplanes is taking steps to combine its operations and contracting teams in an internal organizational change that is expected to improve communication between suppliers and the planemaker, one of the sources said. Boeing declined comment.
