Supply chain issues hamper 737 Max production ramp-up

An aerial view of several Boeing 737 MAX aircraft parked at King-Boeing Field County International Airport in Seattle, Washington on June 1, 2022.

Lindsey Wasson | Reuters

Boeing CEO Dave Calhoun said on Monday that the manufacturer would not increase production of its best-selling 737 Max yet due to supply chain constraints.

The company produces 31 of the Max planes each month on average, and Boeing will focus on stabilizing that rate before ramping up production, according to Calhoun.

“Averages don’t work very well for customers; predictability does. We need to be at 31 every month, consistently and predictably,” he told CNBC’s “Squawk Box,” speaking from the Farnborough Airshow outside London. “We will enter rate increases when we enter rate increases, but the supply chain is not ready for that yet.”

Calhoun spoke shortly after Boeing announced an order from Delta Air Lines for at least 100 737 Max 10 planes, the airline’s first major purchase from the company in more than a decade. Deliveries are expected to begin in 2025.

Calhoun said the longer-term constraints on aircraft production come from engine makers, like General Electric and the Pratt & Whitney unit of Raytheon Technologies. He said that will likely persist for the next 18 months.

Raytheon CEO Greg Hayes echoed those concerns. “It’s really tough,” he said in an interview on CNBC’s “Worldwide Exchange” earlier Monday.

Skilled labor is the hardest thing to find, he added: “There are a lot of things we can’t do because we don’t have the people.”

Hayes said he also expects supply chain and labor shortage challenges to last through late 2023 or early 2024.

Boeing is due to release its second quarter results on July 27.

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