Boeing slowly restarting 737 Max assembly lines, asks supplier to begin work immediately

The Covid-19 pandemic and factory shutdowns have been particularly devastating for Spirit, which derives more than half its revenue from the Max.

A Boeing Co. 737 Max airplane sits on the production line at the company's manufacturing facility in Renton, Washington. Photographer: David Ryder/Bloomberg

Chicago: Boeing Co. has asked its largest 737 Max supplier, Spirit AeroSystems Holdings Inc., to resume work, a critical step toward restarting production of the beleaguered jetliner after a nearly four-month hiatus.

“They’ve asked us to start right now,” Tom Gentile, Spirit’s chief executive officer, said during an earnings call Wednesday.

The Covid-19 pandemic and factory shutdowns have been particularly devastating for Spirit, which manufacturers about three-quarters of each Max aircraft for Boeing, shipping fuselages by rail from Kansas to the Seattle-area for final assembly. Overall production is resuming at a slower-than-expected pace, and is at risk of further cuts depending on how airlines recover from a collapse in travel.

Under an agreement reached by the two companies earlier this week, Wichita, Kansas-based Spirit will ship 125 Max frames to Boeing this year. That’s fewer than the 216 frames Boeing had requested before the virus outbreak and global recession injected fresh uncertainty to its plans to return the narrow-body aircraft to the commercial market.

Boeing is working toward a slow restart of its Max final assembly lines in the coming weeks, a spokesman said. He declined to provide a specific date when the Renton, Washington, plant would fully reopen. The Chicago-based planemaker halted manufacturing of the Max in January, citing uncertainty over when regulators would lift a flying ban imposed in March 2019 after two crashes killed 346 people.

Timing Uncertain

The timing of regulatory approval is still in question, with government technical teams completing the last remaining reviews in social isolation. Spirit said in a filing Wednesday that it expected the Max to be certified for flight “no earlier than late summer.”

A manufacturing hub spun out of Boeing about 15 years ago, Spirit derives more than half its revenue from the Max. The company has laid off thousands of workers and seen its credit downgraded to junk status as it weathers the crisis.

With Max output likely to be dented for years and Airbus SE also reeling, the aerospace supplier is looking for other ways to put its unused capacity to work. Spirit is making 22,000 ventilators for the U.S. government stockpile while it looks to lock in more recession-proof work for the Pentagon, officials said. -Bloomberg