Boeing Supplier Sees Max Trailing Production Goal for Four Years

(Bloomberg) -- Boeing Co.'s 737 Max will take four years to reach production levels originally targeted for 2019 even if the grounded jet resumes flying this summer, according to a supplier of parts for its airframe and engine.

Senior Plc, which counts Boeing as one of its biggest customers, said Monday that it will likely take until 2023 for the Max to reach a build rate of 57 planes per month, which had initially been planned for last year before two fatal crashes led to the model to be idled worldwide.

Chief Executive Officer David Squires said in an interview that the projection reflects comments from Boeing and larger suppliers such as Spirit AeroSystems Holdings Inc., which said last month that it doesn't see Max output returning to the previous peak of 52 a month until 2022.

“We currently expect all of our 737 Max customers to align around a new build rate and ramp profile over the course of 2020 and 2021 with a steady increase in rates over the next four years,” Squires said.

Suppliers to the Max are struggling to maintain earnings with the grounding set to reach one year later this month, making it the longest for a U.S. airliner since the dawn of the jet age. Boeing initially reduced the build rate to keep assembly lines ticking over, before halting production altogether in January.

A Boeing spokesman pointed to comments in January from Chief Financial Officer Greg Smith, who said that the company will resume Max production at low rates in 2020 and gradually increase levels over the coming years.

Senior said 2019 was “tough,” with profit declining and the company pushed into deepening a restructuring plan, with more aerospace jobs to be cut.

Squires said he expects to restart production for the Max in the second quarter. Even if the jet's re-certification is pushed back beyond a target of mid-year for resumed flights, Boeing may not slow things down, he said, having “a pretty clear idea of what they want to do with the supply chain to keep it healthy.”

To contact the reporter on this story: Charlotte Ryan in London at cryan147@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper

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