Boeing Hasn’t Hit Bottom Yet. Neither Have Suppliers
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January 15, 2020 - by Scott Hamilton for leehamnews.com
The extent of the damage to Boeing from the 737 MAX crisis still is unfolding.
Billions of dollars in new costs and charges are expected to be announced on the 2019 earnings release and call, Jan. 29.
But the long-term effects, only surmised until now, are beginning to become evident following information obtained by LNA from multiple sources.
- Restarting production will be at a low initial monthly rate.
- Ramp to previously targeted 57/mo likely lags by three years.
- The impact on suppliers will be profound.
- Impact on employee retention is unknown.
- 737 backlog delivery schedule will require major adjustments.
- Airbus stands to benefit from Boeing's extended lower production rate.
- New airplane years away—even as it's needed for Boeing's future.
- Lower 737 production rate reduces cash flow; 787 rate reduction will hurt, too.
Boeing hasn't hit bottom yet. The worst is yet to come for suppliers...
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