By Scott Hamilton
Feb. 5, 2020, © Leeham News: “Who’s going to fail?”
The question, of course, related to the small- and medium-sized suppliers caught up in the grounding of the Boeing 737 MAX.
As the grounding approaches its first anniversary, March 13, uncertainty, the lack of information and stress permeates the supply chain.
The parties spoke with LNA on the condition of anonymity in order to speak freely.
Speaking with suppliers here, the common thread is that there is little communication from Boeing—and what there is remains ambiguous.
Some of these are co-suppliers with Airbus and/or other manufacturers.
As these suppliers, described privately by one of the speakers as $300m-$400m in revenue, bend under the strain of the MAX grounding, Airbus is worried that its common suppliers with Boeing could buckle.
There is a broad understanding that Boeing has few answers, since it is not in control of its own destiny. This is up to regulators, specifically the Federal Aviation Administration. The FAA is the lead oversight agency and will be the first to recertify the MAX. Whether the other global regulators recertify concurrently or consecutively is secondary. The FAA must act first and it is this action that will dictate when Boeing restarts production.
Boeing said it plans to resume production a “couple of months” before certification. The best guess, and that’s all it is, is that production will resume at a low initial rate in April.
One small supplier said it was notified by Boeing to resume parts delivery in March. But this supplier does not have any indication from Boeing when production will resume.
Several suppliers said they won’t believe production will resume until Spirit Aerosystems begins shipping 737 fuselages to Boeing.