Exclusive: Boeing delays plans for record 737 production until 2021 - sources

[webfact]

Exclusive: Boeing delays plans for record 737 production until 2021 - sources

By Eric M. Johnson and Tim Hepher

 

FILE PHOTO: Aerial photos showing Boeing 737 Max airplanes parked at Boeing Field in Seattle, Washington, U.S. October 20, 2019. REUTERS/Gary He

 

SEATTLE/PARIS (Reuters) - Boeing Co <BA.N> has delayed plans to reach a record production rate of 57 737 jets per month next year, industry sources said on Thursday, even before the U.S. FAA announced a new delay in the 737 MAX's return to service which raised uncertainty over production plans.

 

The world's largest planemaker has also delayed plans to step up from the current rate of 42 jets per month to 46 jets this year until March 2020, as the company struggles to win regulatory approvals for its best-selling jet after two deadly crashes.

 

The U.S. Federal Aviation Administration said on Wednesday that the agency will not approve the grounded commercial jet for flight before year end, and said it was investigating production issues at the Boeing factory in Renton, Washington.

 

FAA chief Steve Dickson, who met with Boeing Chief Executive Dennis Muilenburg on Thursday, is concerned that the U.S. airplane maker is pursuing a 737 MAX return-to-service schedule that is "not realistic," according to an email seen by Reuters.

 

A Boeing spokesman declined to comment on the company's specific production plans. He said Boeing would continue to assess production decisions based on the timing and conditions of the 737 MAX's return to service, which will be based on regulatory approvals and may vary by jurisdiction.

 

In October, Muilenburg told analysts that Boeing expects to be able to maintain its current monthly production rate of 42 aircraft, followed by incremental rate increases that would bring the production rate to 57 in late 2020.

 

Industry sources said this plan has been delayed by months.

 

After getting to 47 jets monthly in March 2020, Boeing will make its next increase to 52 jets per month in September 2020, according to one person familiar with the plans. It will then not reach a record stride of 57 per month until April 2021, the person and a second industry source said.

 

A third industry source confirmed the general timeline but cautioned the plan could be further delayed by the 737 MAX approval process.

 

Boeing mainly builds the latest version of its cash-cow single-aisle family at its Seattle-area factory, but also builds a small number of earlier or military variants of the 737.

 

In April, Boeing cut the number of 737s it produces monthly to 42 from 52 after halting deliveries to airline customers, cutting off a key source of cash and hitting margins.

 

Because the grounding happened when Boeing was going up toward record production levels, and each move of the sprawling supply chain has to be planned far in advance, Boeing and its suppliers are now caught between two conflicting pressures: preparing to get back on the upward path as soon as the 737 MAX is flying but also ratcheting downwards if regulators stall and the grounding continues for longer than expected.

 

(Reporting by Eric M. Johnson in Seattle and Tim Hepher in Paris; Editing by Nick Macfie and Leslie Adler)

 

-- © Copyright Reuters 2019-12-17

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[Tug]

Hope they get it squared away soon !

[Cryingdick]

It is beginning to look like Boeing will have to take some drastic measures. I gave them the benefit of the doubt earlier. However their corporate is acting a bit shady. The problem is the world really can not afford to lose Boeing right now. Air travel is forecast to increase by some mind boggling number. I forget what the number is but it is astounding

 

I think they should bite the bullet and perhaps completely redesign this thing. I was a big believer in them and can't say I have any confidence in Boeing anymore. If Boeing hopes to continue to be a part of a duopoly going forward they had better get their heads right. If they act swiftly and decisively they can protect themselves. However I have been shocked by how badly this has all been handled and some of the revelations of how the company operates. 

 

So far the stock is simply flat this year but it should trade well under $300 a share for this amateurish bumbling of affairs. They have no business paying dividends to anybody before they can guarantee a safe plane at this point. Heads need to roll and then hopefully Boeing can come back stronger than ever and they will.

 

This is coming from an enthusiast and former shareholder. 

[zydeco]

Boeing could have made the decision to design an entirely new aircraft. Instead of spending money on that, however, they redirected billions and billions and billions in stock buybacks to pump up the stock price and give bonuses to the grifters in management.

[canuckamuck]

I should have bought some Airbus stock.

[Tropicalevo]

This morning, I read in the Sydney Morning Herald and The Times that Boeing are suspending production completely.

[Rookiescot]

One thing is for sure. They need to change the name.

No-one is going to get on anything with Max 8 written on it. 

[zydeco]

2 minutes ago, Rookiescot said:

One thing is for sure. They need to change the name.

No-one is going to get on anything with Max 8 written on it. 

Or the airlines will follow Ryanair's example and refuse to tell passengers that they are being put on one of the flying coffins. https://simpleflying.com/ryanair-boeing-737-max-mystery/

[Cryingdick]

13 minutes ago, canuckamuck said:

I should have bought some Airbus stock.

 

The problem with Airbus stock is it trades on the CAC. It makes it a little bit like buying the best diamond wedding ring at Walmart.

[Rookiescot]

Just now, zydeco said:

Or the airlines will follow Ryanair's example and refuse to tell passengers that they are being put on one of the flying coffins. https://simpleflying.com/ryanair-boeing-737-max-mystery/

Its not just that. Sales will be difficult to come by when the product (having been made safe mind you) is tarnished with the reputation the Max 8 has.

[Cryingdick]

11 minutes ago, Rookiescot said:

Its not just that. Sales will be difficult to come by when the product (having been made safe mind you) is tarnished with the reputation the Max 8 has.

 

As I have said earlier people can avoid the Max but at a certain point if you don't fly it you don't go. The demand is that high and getting more with every passing month. So let's say people will not fly the Max at all no matter what. Then what happens?

 

You might not be able to get a flight or will not be able to get a connecting flight. You will need to book your flight a year ahead of time. This is not only disastrous for Boeing if the problem is not fixed but it is a catastrophe for the flying consumer. It can't be replaced tomorrow. I have no idea what the solution is.

 

forgot to mention the price of tickets will sky rocket. BKK- ORD $4,500 economy. Make that $8,000 if you fly with Thai.

[Rookiescot]

5 minutes ago, Cryingdick said:

 

As I have said earlier people can avoid the Max but at a certain point if you don't fly it you don't go. The demand is that high and getting more with every passing month. So let's say people will not fly the Max at all no matter what. Then what happens?

 

You might not be able to get a flight or will not be able to get a connecting flight. You will need to book your flight a year ahead of time. This is not only disastrous for Boeing if the problem is not fixed but it is a catastrophe for the flying consumer. It can't be replaced tomorrow. I have no idea what the solution is.

 

forgot to mention the price of tickets will sky rocket. BKK- ORD $4,500 economy.

I think we are in heated agreement here mate.

The issues you correctly state is my reason for suggesting Boeing re-brands the Max 8. I have absolutely no doubt that when these aircraft take to the skies again they will be as safe as its humanly possible to make them but the name Max 8 is always going to be an issue for the general public.

Most people using a flight cant tell the difference between a Boeing or an Airbus. They only realise what they are sitting in if they happen to glance at the safety card.

[Cryingdick]

Just now, Rookiescot said:

I think we are in heated agreement here mate.

The issues you correctly state is my reason for suggesting Boeing re-brands the Max 8. I have absolutely no doubt that when these aircraft take to the skies again they will be as safe as its humanly possible to make them but the name Max 8 is always going to be an issue for the general public.

Most people using a flight cant tell the difference between a Boeing or an Airbus. They only realise what they are sitting in if they happen to glance at the safety card.

 

The real trouble would be if they rebrand it and for whatever reason one crashes for a problem unrelated to the original.

 

I was listening a little bit about the DC10 being rebranded and then later McDonnell Douglas said something or other to reassure the public everything was better. This reminded the customer after the rename that it had problems.

 

If they rename the plane they need to remain silent about it forever and pray it doesn't crash. 

 

 

[Bluespunk]

Boeing to temporarily halt 737 Max production in January https://www.bbc.co.uk/news/business-50817124

[Tropicalevo]

1 hour ago, Rookiescot said:

One thing is for sure. They need to change the name.

No-one is going to get on anything with Max 8 written on it. 

There was a report a while back that they have done that. There was even a photograph of the newly painted name on the plane.

 

Apologies to colinneil - I had not seen your post when I wrote this. My bad.

[Cryingdick]

7 minutes ago, Tropicalevo said:

There was a report a while back that they have done that. There was even a photograph of the newly painted name on the plane.

 

Until Boeing itself announces a name change and they would have to do this if only because of their shareholders the name hasn't changed. Do people not realize if the name change came from Boeing it would be the biggest biz news today? 

 

It doesn't matter if there is a plane in a hangar somewhere with another name. The instant you put that plane into service and call it anything other than Max your airline will be sued into the ground even if the plane doesn't crash. 

 

Ryanair has a plane that is grounded in some hangar in Washington with a  detail painted on it. Let them try to book it and fly it in Europe once it is cleared to fly as anything other than the official name. They will be sued out of the EU.

 

I painted Tesla on my Honda. 

[candide]

An unstable model which needs a software to become stable. Wouldn't a stable airplane be better in any case?

[Tropicalevo]

16 minutes ago, Cryingdick said:

 

Until Boeing itself announces a name change and they would have to do this if only because of their shareholders the name hasn't changed. Do people not realize if the name change came from Boeing it would be the biggest biz news today? 

I read it in The Times business section!

[NanLaew]

48 minutes ago, Cryingdick said:

 

Not sure of your point. Airbus can't produce enough planes and are booked out for a decade now. Sure you order Airbus now that is pretty obvious. If you don't order Airbus yesterday it's too late now. Airbus simply lacks the production capacity to be the sole name in aviation now. 

 

If their leadership is good hopefully they will invest heavily into production to fully exploit this. However in the past they are known for dropping the ball as well. If I am CEO of Airbus I would try to step on Boeing's throat.

Apart from the body test failure, I thought the point that airlines may already be increasingly losing confidence in a broader range of Boeing products was evident. The airline with a higher component of Boeing products in their fleet must be doing a whole lot of soul searching right now and maybe, just maybe placing customer safety ahead of $/seat

 

Note that the very recently announced decision by Boeing to suspend 737 MAX production was made after a meeting of board members and shareholders. It's a shame that their falling share price has prodded them to become more accountable versus the scenario of trying to catch customer share and beat Airbus had precedent.

 

I never suggested Airbus were squeaky clean and agree that the increased scrutiny that they will experience as a result of Boeing's folly is not a bad thing at all. As you suggest, it would take an astronomical surge in investment for them to fill the gap, probably the same amount that Boeing would need to invest in developing new aircraft that are not bolt-ons to ageing designs.

[metisdead]

Some argumentative bickering posts about :

 

Quote

It was in the news a few weeks ago, showing a max 8 in Ryanairs livery, now named the 737 8000.

Quote

 

Clearly you dont keep up with the news, and dont know how to GOOGLE.

I just did it is there.

 

 

Then please provide a link to the article of which you are referencing in case other members do not find the correct article doing the GOOGLE search.

 

15) Any links posted must lead to the website the link indicates. Links that are misleading or direct to a site different than the one indicated are not allowed.

 

 

A post regarding the Boeing 777X has been removed as well as the replies as this topic is not about the Boeing 777X.

[bluesofa]

1 hour ago, metisdead said:

Some argumentative bickering posts about :

 

 

Then please provide a link to the article of which you are referencing in case other members do not find the correct article doing the GOOGLE search.

 

15) Any links posted must lead to the website the link indicates. Links that are misleading or direct to a site different than the one indicated are not allowed.

 

 

A post regarding the Boeing 777X has been removed as well as the replies as this topic is not about the Boeing 777X.

Trying to not get drawn into the bickering, but I remember reading about this and I wonder if this might be what was referred to:

https://www.theguardian.com/business/2019/jul/15/boeing-737-max-ordered-by-ryanair-undergoes-name-change

Also this article refers to the same name change:

https://www.prdaily.com/can-a-name-change-save-boeings-737-max/

 

Hope this helps.

[hotchilli]

9 hours ago, webfact said:

FAA chief Steve Dickson, who met with Boeing Chief Executive Dennis Muilenburg on Thursday, is concerned that the U.S. airplane maker is pursuing a 737 MAX return-to-service schedule that is "not realistic," according to an email seen by Reuters.

Boeing executives are paying the price of taking the urine out of FAA for allowing them to virtually sign-off their own aircraft when they knew they were un-fit for service due to changes in configuration.

FAA will make them pay dearly.

[Nigel Garvie]

22 minutes ago, hotchilli said:

Boeing executives are paying the price of taking the urine out of FAA for allowing them to virtually sign-off their own aircraft when they knew they were un-fit for service due to changes in configuration.

FAA will make them pay dearly.

"FAA approval would allow US airlines to fly the aircraft, but European operators would need Easa clearance before returning it to commercial service."

BBC

No quick fix for Boeing even if they got the FAA onside again. The non acceptance of FAA approval by EASA, is unusual to say the least, but if you mess with safety authorities once, it comes back to bite you, big time.

[Basil B]

Do not care what they name it, it will basically be the same aircraft, trust in it is totally lost, the only people who will buy that plane is operators in third world countries that do not have internet or news papers. 

[Nigel Garvie]

14 hours ago, Basil B said:

Do not care what they name it, it will basically be the same aircraft, trust in it is totally lost, the only people who will buy that plane is operators in third world countries that do not have internet or news papers. 

That would be third world countries like the UK, where the wonderful Walsh (A recognised bottom feeder) has put in a provisional order for 200 for IAG (Which BA is a large part of).

[Basil B]

8 hours ago, Nigel Garvie said:

That would be third world countries like the UK, where the wonderful Walsh (A recognised bottom feeder) has put in a provisional order for 200 for IAG (Which BA is a large part of).

It is a cunning plan... when Boeing can not deliver or the planes are indefinitely grounded, BA will sue for damages. As Boeing is a US company B.A. could be awarded Trillions of Dollars. ???? 

[Nigel Garvie]

1 minute ago, Basil B said:

It is a cunning plan... when Boeing can not deliver or the planes are indefinitely grounded, BA will sue for damages. As Boeing is a US company B.A. could be awarded Trillions of Dollars. ???? 

Yes, the other theory is that it is a negotiating  move to get Airbus 320s on the cheap, Walsh has committed to nothing with Boeing yet.

 

If this is the case he may be disappointed,  Airbus has more orders than it can fulfil and may simply tell him to go forth and multiply.

[Basil B]

12 minutes ago, Nigel Garvie said:

Yes, the other theory is that it is a negotiating  move to get Airbus 320s on the cheap, Walsh has committed to nothing with Boeing yet.

 

If this is the case he may be disappointed,  Airbus has more orders than it can fulfil and may simply tell him to go forth and multiply.

Have not heard the Resident Share tipster suggesting that Airbus may be a good investment.

[stevenl]

Finally Muilenberg is taking responsibility.

[Cryingdick]

1 minute ago, stevenl said:

Finally Muilenberg is taking responsibility.

 

Stock soars on the news that Muilenburg was fired. Of course they said resign but he was ousted. Hopefully they keep the chairman and CEO positions separate in the future.