UPDATED: Boeing says it still will deliver up to 450 737s this year

Boeing Co. photo

By Bryan Corliss

April 26, 2023, © Leeham News — Boeing says it will increase rates on the 737 line in Renton to 38 a month to maintain its plan to deliver between 400 and 450 737 MAX jets to airlines this year.

That was the first line of the company’s first-quarter earnings release, which showed Boeing lost $149 million on the quarter, on revenues of $17.9 billion.

Boeing had optimistically aimed for jumping MAX rates from the current 31 a month, as soon as June. However plans for the 737 line had been in question, after recent revelations that manufacturing problems and a software issue would cause delays in deliveries.

  • ‘Gnarly’ 737 defect to take weeks to fix
  • Boeing commits to MAX increases
  • Improving numbers at BCA
  • Supply chain issues continue, Boeing says

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Howmet taking cautious approach projecting OEM deliveries for 2023

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By Bryan Corliss

Feb. 15, 2023, © Leeham News – Howmet Aerospace is taking a “cautious and conservative view” that Boeing will build 30 737s a month this year and Airbus will build 53 or 54 A320s and A321s.

That’s what CEO John Plant told investors Tuesday, as Howmet reported its year-end and fourth-quarter earnings. 

That’s far more conservative than the 737 build rate that Spirit AeroSystems had projected the week prior, Plant acknowledged. Executives with the Wichita airframer project sending 42 737 fuselages a month to Boeing by the end of this year.

Howmet, which fabricates fasteners and casts pieces for aerostructures and jet engines, reported annual profit of $1.3 billion for last year, up 12% when adjusted for one-time items. For the fourth quarter, its adjusted profit was $336 million, up 13%.

  • Howmet ended last year with excess inventory
  • Company still projects 17% growth in Commercial 
  • Howmet hiring, but not everyone is sticking around
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Spirit gearing up to produce 42-a-month on 737 program by the end of 2023

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By Bryan Corliss

Feb. 8, 2023, © Leeham News – Spirit AeroSystems plans to deliver 42 new-built 737 MAX fuselages a month to the Boeing Co. by the end of this year, executives said Tuesday. 

Whether that’s how many 737s Boeing is delivering to customers is not for Spirit to say, CFO Mike Suchinksi told analysts during the company’s year-end earnings call.

“What Boeing delivers to their customers is, we have no purview. That’s on the Boeing side,” he said. “We’re just trying to communicate to you what the contract schedules have been and what we expect to produce internally and what we expect to ship to Boeing and to get paid for.” 

But Spirit and its suppliers still have major challenges to overcome before they can get to those higher rates, Suchinski and CEO Tom Gentile warned. The company, which struggled through a tough year in 2022, is making major cash outlays in early 2023 to acquire the people and materiel it will need to reach those higher rates, and that will weigh on profitability for the next few quarters.

  • Losses doubled in fourth quarter
  • Outlook: 420 737s and 650 A320s
  • Some suppliers in ‘deep distress’
  • Spirit hiring, but new workers need time
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‘What kind of vision is that?’ Industry analysts scorch Boeing and CEO Calhoun

By Bryan Corliss

Feb. 7, 2023, © Leeham News – Less than a week after Boeing CEO Dave Calhoun stood in the company’s Everett factory and vowed to “maintain this leadership culture forever,” a panel of top aerospace industry analysts blasted Boeing’s corporate culture and criticized Calhoun’s leadership, saying he lacks vision, industry knowledge – even charisma.

Aerospace analyst Kevin Michaels.

“No new aircraft until 2035,” said AeroDynamic Advisory Managing Director Kevin Michaels. “What kind of vision is that?”

Having Calhoun at the helm of Boeing at this juncture is “the worst-case scenario,” said Michaels’ partner at AeroDynamic, Richard Aboulafia. “(Calhoun) is somebody not only not from this industry, but someone who maintains a willful ignorance of it.” 

The challenges Boeing faces mending fences with all the groups it has disappointed or alienated in the past 20 years – customers, suppliers, regulators and workers – are immense and it may be more than one person can handle, said Bank of America Managing Director Ron Epstein, who also was on the panel. 

“It’s a hard, hard, hard job right now, to be the president of the Boeing Co.,” Epstein said. 

  • Panel rips lack of new product development
  • Without a new airplane, whole industry is challenged
  • Panel: Boeing struggles to retain engineering talent
  • Michaels: Suppliers in ‘crisis’

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Forecast 2022: Airbus

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By Bjorn Fehrm

Introduction

January 3, 2022, © Leeham News: When the COVID-19 Pandemic started, it was tough to predict its impact on world air travel and how long the downturn would last.

The aircraft OEMs are at the top of a supplier pyramid of hundreds of companies and millions of parts. The prediction of airliner output at the end of this chain is critical for all, but most for suppliers. The suppliers have strained their liquidity to expand the production at the demand of the OEM.

A downturn in deliveries means less money, which forces sensitive suppliers into a liquidity crisis. Brake moderately, and the suppliers can handle it. Brake hard, and they can’t, or brake a bit and then harder, and it’s as bad.

Airbus managed the reductions well, and with an intact supplier chain, 2022 will be about how hard to step on the throttle as the Pandemic isn’t done yet.

Summary
  • With a competitive product range and an intact supplier base, 2021 is about the correct level of increase in deliveries, with the Pandemic a bigger worry than the main competition.
  • With Airbus’ in perhaps its relative strongest position ever, how much this shifts the market is more a supply issue than anything else.

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Boeing should build 757 replacement in Washington

Commentary

Dec. 22, 2020, © Leeham News: If you get a chance over the next few weeks – in between binge-watching The Queen’s Gambit, putting up the 79 extra feet of Christmas lights you ordered this year and figuring out how to buy surprise Christmas gifts for your spouse when you have a joint Amazon account – you should take 90 minutes to watch this video from our friends at the International Association of Machinists District Lodge 751.

By Bryan Corliss

The Machinists on Dec. 8 hosted (on Zoom, of course) a high-level panel discussion about the state of the aerospace industry and Washington state’s role in it, featuring a whole bunch of Brand-Name People Who are Smarter Than Me(c).

They shared their insights for those of us coffee-drinkers who are trying to read the tea leaves to divine what Boeing’s next moves should be as it tries to get back on its feet – and what the implications are for its home state.

The takeaway:

The problems for Boeing are obvious, and the solutions are pretty clear – but doing the smart thing would require a major cultural shift from an executive team that’s locked into a 1990s vision of how business gets done.

  • Boeing needs a 757 replacement this decade
  • It should get built in Washington state
  • There are concrete – and audacious – steps for the state to take
  • Can GE alum Calhoun change Boeing’s GE culture?

    Buzz about Boeing’s next new airplane returned this month to making a 757 replacement. Boeing photo.

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Supply chain focus: Hexcel’s first 2020 quarter

By Bjorn Fehrm

April 22, 2020, ©. Leeham News: With the COVID-19 meltdown of airline traffic and aircraft deliveries, we place a special focus on the airliner industry supply chain in the next months.

Hexcel Corporation reported its 1Q2020 yesterday. In addition to the absence of MAX deliveries for a year, the mounting COVID crisis meant revenue was down with 11% year on year and profits 40%. The merger with Woodward Inc. is off. “This is the time for crisis management, not a merger,” said management.

Hexcel is a key supplier to Airbus A350.

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Aviation Forum Munich: Boeing moves away from Partnership for Success

By Bjorn Fehrm

November 6, 2019, ©. Leeham News at Aviation Forum Munich: The second day of Aviation Forum Munich had an interesting presentation from Boeing’s VP of Sourcing, Jody Franich.

He described the One Boeing approach for Manufacturing and Sourcing and how Boeing is moving away from its supply chain Partnership for Success program, with the supplier cost down focus replaced by a more long-term cooperation model with a mutual benefit focus.

Boeing’s VP Sourcing Office Jody Franich presents to Aviation Forum Munich.

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Aviation Forum Munich: Vertical integration on the way back

By Bjorn Fehrm

November 5, 2019, ©. Leeham News at Aviation Forum Munich: The Aviation Forum kicked off in Munich today, a yearly production and supply chain event started by the Hannover based Institute for Production Management nine years ago.

Today’s conference themes were How the OEMs benefit from Supplier Innovation, Additive Manufacturing trends and discussions around Outsourcing and Insourcing.

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Mitsubishi sets stage for announcement at Paris

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Introduction

By Bryan Corliss

May 10, 2019, © Leeham News: Senior officials of Mitsubishi Aircraft Corp. said they’ll announce a new concept to replace their proposed MRJ70 at next month’s Paris Air Show. But they’re keeping details to themselves until then.

“We’ve got a couple rabbits in our hat,” said Alex Bellamy, the chief development officer for the MRJ program. “We’d like to keep them in our hat for now. But rabbits have a habit of bouncing.”

Bellamy spoke with a handful of industry reporters Friday at a roundtable following the formal grand opening of Mitsubishi Aircraft Corp America’s new office in Renton (WA). The event – which included the ceremonial opening of sake barrels with hammers–attracted senior executives from MITAC’s headquarters in Nagoya, Japan, and local business and government leaders.

Mitsubishi is flight-testing the 92-seat MRJ90 in the skies above Moses Lake (WA). But in Nagoya, engineers are working on a clean-sheet design for a 76-seat, three-class regional jet.

It’s what the market is calling for, Bellamy said, and right now, there’s a declining number of competitors willing to provide it.

Summary
  • One competitor is going, the other doesn’t have a modern, Scope-compliant aircraft.
  • 50-years opportunity.
  • Combining comfort and new-technology economy

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