Boeing's most vulnerable suppliers will come under greater stress with the plane maker's announcement that it doesn't expect regulators to clear the 737 MAX to return to service till the summer.
Share to linkedin... [+]The thousands of workers who produce the 737 MAX put down their tools Monday as production halted at Boeing’s factory in Renton, Washington. It could well remain shut down through September, analysts say, and perhaps through the end of the year, following the company’s announcement that it doesn’t expect to receive approval from the FAA for its bestselling plane to return to service till the summer.
The announcement came as a surprise to an industry that had generally expected that return to service could come in March or April. If regulators require that training is conducted only on 737 MAX simulators, of which there are just 34 globally in service as of yet, it could take 30 days to as much as three months before the planes airlines already have are fully crewed, says Michael Boyd, a Denver-based airline consultant.
Makers of components of the airframe like fuselage producer Spirit AeroSystems and their suppliers are also highly vulnerable, says Michaels. They have no ability to retool their production capacity for other uses in the near term and are strained by Boeing’s previous demands that they prepare to ramp up production to meet the plane maker’s goal of reaching a rate of 57 737s a month while it stretched out payment terms to 90 to 120 days.
Distressed suppliers in certain areas could get rolled up. Engine makers looking to backward integrate could make acquisitions, says Olin.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Boeing says 737 Max won't be approved to fly again until mid-2020Boeing executives say the 737 Max will not be approved to fly until the middle of this year, the company said Tuesday.
Read more »
Boeing seeks to borrow $10 billion or more amid 737 MAX crisis: sourceBoeing Co is in talks with banks about borrowing $10 billion or more amid rising...
Read more »
Boeing expects 737 Max to remain grounded several more monthsThe new timeline means the 737 Max would miss at least part of the summer travel season, adding to the compensation that Boeing is likely to pay airlines.
Read more »
Boeing warns of new 737 MAX delay, now sees mid-year return to serviceBoeing Co said on Tuesday it does not expect to win approval for the return of t...
Read more »
Boeing says it doesn't expect to get approval from regulators for 737 Max until 'mid-2020'
Read more »