Boeing is considering how to make the already-lean 737 production line even more efficient with an eye toward increasing rates beyond 42 per month, the commercial airplane division CEO said today.
Jim Albaugh, speaking at the annual Credit Suisse Aerospace conference, said the demand is here for a higher rate.
“We went into this year wanting to reduce the backlog and we failed miserably,” he said, referring to record orders and commitments for the 737NG and 737 MAX.
The challenge of going higher is that the Renton 737 plant is nearing capacity. A solution may be to further increase efficiency of the facility.
“If you go back two years with the 777 program, the maximum rate we had was seven per month in the factory. With lean manufacturing and engineering, we were able to take that up to 8.3 per month with very insignificant investment. It is my hope that as we continue to lean-out the 737 program, we could be in a similar position where we can go even higher than 42 if we chose to,” Albaugh said.
“We don’t have to make a decision on going higher than 42 for a while. We’re going to go to 42 in 2013. We’ll look at the market, we’ll look at the demand…and probably in late 2012, late 2013, if we can go higher we’ll make that decision.
“The other thing that we have to do is really think about how we transition from the 737NG to the 737 MAX. Regardless as to where we are going to build the 737 MAX, you don’t want to get into a situation where we aren’t delivering narrowbodies. We have to build a bridge to the 737 MAX.”
The 42 rate is sustainable, Albaugh said. “As we look at the skyline, the demand is there. We’re basically sold out through 2015. We can sustain them.”
Where will MAX be built?
“We are looking at quite a number of things. We’re taking a long-term view of what makes sense. How complicated can we be. The business climate. The environment. The assurity of delivery. We’ll make a decision when we have the facts.”