Boeing has resumed production of its popular 737 MAX jetliner, marking a significant step forward following a seven-week strike by 33,000 factory workers. The restart is critical for the heavily indebted aerospace giant as it works toward recovery. With approximately 4,200 MAX orders from airlines eager to address the rising demand for global air travel, the pressure to deliver is high.
However, Boeing’s ability to scale up production hinges on the Federal Aviation Administration (FAA) completing its investigation into a Boeing-supplied engine implicated in the fatal Lion Air crash in October, as well as other incidents. The FAA must then approve a maximum production rate of 38 MAX jets per month. FAA Administrator Mike Whitaker has cautioned that achieving this approval could take several months.
Last week, the IAM union’s members voted to accept Boeing’s revised contract offer, which included a larger wage increase and bonus payments to help ease tension between the company and striking machinists. This ended the work stoppage and cleared the way for production to begin in Renton.
But a slew of problems has already cropped up. Key manufacturing violations, including routine bypassing of quality control measures and recycling faulty parts back into airplanes, have raised concerns about Boeing’s management and oversight. The FAA’s ongoing scrutiny of Boeing has also increased pressure on the company to improve its oversight.
Getting the 737 MAX line moving again will take time and resources. For example, reassembling a new airplane requires several days of retooling and testing before the aircraft can be shipped to its airline customer. The cost of that rework and testing can add up to months of lost production for Boeing.
On top of that, Boeing will have to spend significant money on retraining machinists and implementing a revamped parts tracking system. That overhaul is needed to prevent mistakes like the one with the Alaska Airlines MAX 9, which was returned for rework after it landed in January because of a loose door-plug problem. It was found that the faulty part had been improperly fitted to the airplane before it left the Spirit Aerosystems plant in September. It was. The part was returned to Boeing’s Renton facility and reused in a finished airplane.
Boeing’s chief executive Kelly Ortberg has been working to reassure airlines that the company is committed to resuming MAX production quickly after it clears all issues with the FAA. But even if the 737 MAX can fly again, it will be difficult for Boeing to make up ground in its order backlog. Many airlines are shifting to more fuel-efficient A320 models that carry more passengers. That shift will cut into the number of 737 MAXs that can be built and delivered. That could leave the company with a big hole in its future revenues. Boeing’s stock is down 37% this year and has slumped more than 20% since the start of the month.
