Askume news on September 13: Boeing Chief Financial Officer Brian West said on Friday that a strike by more than 30,000 workers at Boeing’s US West Coast plants would hamper the aircraft maker’s ability to achieve 737 MAX production targets and stabilize its supply chain.
West also said at the Morgan Stanley Laguna conference that he expects third-quarter margins in the company’s defense and aerospace division to be as negative as they were in the second quarter.
Workers in Seattle and Portland, Oregon, where the Max and other jets are made, went on strike after overwhelmingly rejecting contract deals demanding higher pay . The strike, the first labor strike since 2008, comes as Boeing has come under intense scrutiny from U.S. regulators and customers after a 737 Max jet crashed in mid-air in January.
West said Boeing is making progress in boosting production of its best-selling jet to 38 jets per month by the end of the year, despite ratings agencies expressing doubts about that target.
“We’ve made good progress in stabilizing production and are on track to produce 38 vehicles per month by the end of the year. Now, it will obviously take a little longer,” West said.
However, West did not comment on specific details regarding the targets, which depend on the duration of the attack.
The strike has raised uncertainty and concerns among parts suppliers for projects such as the 737 Max. Several companies have been forced to reinstate parts for parts.Already there is trouble in planning production as Boeing continues to change its internal forecasts for suppliers.
West said the company’s first priority was to stabilize its supply chain, but “that goal has become more difficult.”
West suggested Boeing would stop sourcing parts from some suppliers affected by the strike because the plane maker has enough inventory. It has no effect on the company’s 787 wide-body jets, which are built by non-union workers in South Carolina.
Asked about the supply chain, West said that for non-787 programs, if suppliers don’t stay behind and the company has enough inventory, “you know, there won’t be any more supplies.”
He said the news “happened overnight”.
