Boeing Bets Big On Max Production Restart By Mid-Year With New Hires
Boeing is making a massive bet with the hiring of new mechanics for its shuttered 737 Max production line that a restart could begin imminently, reported Bloomberg.
Max production lines were suspended last month as there was no clear pathway for the planes to return to the skies via the Federal Aviation Administration (FAA).
Boeing started hiring hundreds of new employees late last year with the expectation production would resume by mid-2020. In early December, Boeing hired 115 new mechanics to its Pacific Northwest manufacturing hub. Another 122 were brought on in early January and another 143 by mid-month. IAM District 751, Boeing's largest labor union, said the plane manufacturer had hired 730 new workers, a figure that is entirely net increases, despite 31 mechanics leaving.
Boeing's labor and supply chain management expenses related to the Max have been soaring since the planes were grounded about a year ago, and the company incurred even higher costs associated with production shutdowns last month. About 3,000 employees remain on payroll to avoid a fracturing of its supply chain.
Boeing's timetable for a mid-year production restart could be a little too optimistic with planes grounded. The FAA has provided limited details on when the aircraft will return to the skies.
There are some signs that Boeing's restart could be nearing, or maybe it's just more gambling by its suppliers: Spirit AeroSystems Holdings Inc., Boeing's top supplier with 3,200 employees, said it would resume Max fuselage production at the end of March.
Ken Herbert, an analyst with Canaccord Genuity, said 200 of the recent Boeing hiring’s had been mechanics for the Max production line. Herbert said other workers had been shifted to other product lines but would be diverted back to Max production when restart occurs.
Doug Alder, a Boeing spokesman, told Bloomberg that "we've maintained our staffing levels on the 737 program to focus on factory initiatives, while temporarily assigning some employees."
Getting Max production off the ground by mid-year could be a difficult task for Boeing, and the number of resources it's allocating into its supply chain for immediate restart could prove disastrous if delays continue.
Hints of new delays are coming from Southwest and United Airlines, who have extended Max cancelations until late August to the early September timeframe.
And more issues are developing, with about half of undelivered Max planes have foreign-object debris (FOD) in their fuel tanks.
Boeing's big bet on mid-year production restart could prove disastrous if more delays are seen.
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