The agency will not authorize the expansion of production


Boeing 737 Max 8 fuselages manufactured by Spirit Aerosystems in Wichita, Kansas, are transported on a BSNF train heading west over Bozeman Pass March 12, 2019 in Bozeman, Montana.

William Campbell | Corbis News | fake images

It will likely be months before the Federal Aviation Administration approves boeing to increase production of its best-selling 737 Max, the agency's head said Thursday.

In January, the FAA prohibited the manufacturer from increasing production of the planes, weeks after a door plug exploded in the air of a new 737 Max 9, just minutes after a Alaska Airlines flight. Federal safety investigators found that the bolts holding the panel in place appeared not to have been installed before the plane was delivered to Alaska Airlines last year.

Boeing CEO Dave Calhoun and other top company leaders met with FAA Administrator Mike Whitaker and other agency officials early Thursday to present a quality improvement plan for which the agency gave Boeing 90 days to produce, in which the company outlined its efforts to improve staff training and production. practices in their factories.

“We will not approve production increases beyond the current limit until we are satisfied,” Whitaker said. He said there is no timeline, but it probably won't be in the next few months.

Whitaker said at a news conference after the roughly three-hour meeting that Boeing's work was far from complete and that the agency's heavy oversight of the company would continue.

Whitaker's comments suggest that Boeing has a long way to go to ensure manufacturing quality. Meanwhile, he is grappling with a crisis that has drained the cash of an iconic American company eager to improve its reputation after two fatal Max crashes in 2018 and 2019 that killed 346 people. Whitaker is scheduled to brief lawmakers on the House Transportation and Infrastructure Committee on June 4.

“Boeing has drawn up its roadmap and now needs to execute it,” he said.

The FAA said its top leaders will meet with Boeing every week to review its performance metrics.

Federal Aviation Administration Administrator Mike Whitaker speaks at a news conference about the FAA's work to hold Boeing accountable for safety and production quality issues, at Federal Aviation Administration headquarters Nov. 30. May 2024 in Washington, DC.

Andres Harnik | fake images

Boeing has reduced its production of the Max to eliminate production failures, improve manufacturing processes and address increased FAA oversight.

The resulting aircraft delays have meant that airline customers, such as United and South westThey have had to rethink their growth plans.

Boeing has produced an average of 21 Max planes a month over the past three months, according to a Jefferies estimate, well below the target pace of about 38 a month it revealed in mid-2023.

Less production drives up costs and fewer plane deliveries deprive the company of cash because airlines pay most of the price of the plane when they receive it.

Boeing Chief Financial Officer Brian West said May 23 that the company expects to burn cash this year rather than generate it. For the current quarter alone, Boeing expects to use about $4 billion.

Boeing executives have acknowledged that the new plan won't change things immediately.

“The 90-day plan … is not a goal,” West said at an investor conference last week. “We look forward to the feedback we will receive next week.”

Boeing's report details the steps it has taken to invest in its workforce, which is made up of thousands of new hires after experienced staff accepted exit packages during the pandemic. The manufacturer also said it would improve safety culture and eliminate defects.

The company said it added 300 hours of training material and introduced trainers to the workplace. He said he is also setting aside more time in managers' schedules to be present in factories rather than in meetings.

The company said it has also reduced so-called travel work, where tasks required on planes are performed out of sequence.

“We are confident in the plan we have presented and are committed to continually improving it,” said Stephanie Pope, chief executive of Boeing's commercial airplanes unit, who was appointed in March after an executive restructuring at the company. “We will work under the supervision of the FAA and fulfill our responsibility to the flying public to continue delivering safe, high-quality airplanes.”

The manufacturer also included in its report information about factory “stalls,” in which it stopped work to talk with employees about possible improvements to production lines. The manufacturer implemented those brief work breaks in the months after the Alaska Airlines door plug explosion.

Calhoun, who said he would resign at the end of the year, told staff in April that the company had received more than 30,000 “ideas on how we can improve” and that he “talks about submissions” (concerns raised by staff) and comments. They increased by 500% compared to 2023.

Don't miss these CNBC PRO exclusives

scroll to top