Boeing’s new 737 woes are an ugly plot twist in a comeback tale
Boeing’s executives had a golden opportunity to talk up the planemaker’s turnaround at its annual shareholder gathering Tuesday. Instead, they’ll be in damage control mode — again. The company is grappling with a manufacturing issue affecting its cash-cow 737 jetliner, which has temporarily brought some deliveries to a halt. While it’s too soon to know the full repercussions of the setback, one thing is clear: Boeing is in for a rocky few months. Disruptions at the planemaker’s factory and with its supplier base come just as Boeing was cranking up 737 output in an effort to boost cash flow. United Airlines Holdings Inc., Southwest Airlines and Ryanair Holdings Plc. are among the airlines counting on deliveries of those workhorse jets for the busy summer travel season. And CEO Dave Calhoun is working to keep the trust of investors, some of which he only recently won over after years of crises and snafus. “This is another loss of credibility and trust in Boeing production quality and standards,” said aviation consultant Mark D. Martin. Calhoun is expected to address the issue head on during Tuesday’s virtual annual meeting. He’ll be in front of investors again on April 26 for first-quarter results. It’s a reminder that even as demand soars for air travel and new jetliners, investors are still skittish. Before the issue was disclosed after-market on Thursday, Boeing shares had surged about 49% since November, when Calhoun said he was working to triple the company’s yearly free cash flow to $10b by the middle of the decade. Shares rose again April 11 when the planemaker announced first-quarter deliveries that beat rival Airbus SE, the first in nearly five years. On Friday, Boeing stock dropped 5.6% to $201.71, the biggest decline in more than six months. The new 737 problem involves two of the eight fittings where the jet’s vertical stabilizer is attached to the rear of its fuselage. A contractor, Spirit AeroSystems Holdings Inc., discovered that since 2019 two of its suppliers for the fittings — but not a third — had at times used non-standard manufacturing processes, according to Cai Von Rumohr, an analyst at Cowen & Co.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-04-17/general/boeing2019s-new-737-woes-are-an-ugly-plot-twist-in-a-comeback-tale
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Boeing’s new 737 woes are an ugly plot twist in a comeback tale
Boeing’s executives had a golden opportunity to talk up the planemaker’s turnaround at its annual shareholder gathering Tuesday. Instead, they’ll be in damage control mode — again. The company is grappling with a manufacturing issue affecting its cash-cow 737 jetliner, which has temporarily brought some deliveries to a halt. While it’s too soon to know the full repercussions of the setback, one thing is clear: Boeing is in for a rocky few months. Disruptions at the planemaker’s factory and with its supplier base come just as Boeing was cranking up 737 output in an effort to boost cash flow. United Airlines Holdings Inc., Southwest Airlines and Ryanair Holdings Plc. are among the airlines counting on deliveries of those workhorse jets for the busy summer travel season. And CEO Dave Calhoun is working to keep the trust of investors, some of which he only recently won over after years of crises and snafus. “This is another loss of credibility and trust in Boeing production quality and standards,” said aviation consultant Mark D. Martin. Calhoun is expected to address the issue head on during Tuesday’s virtual annual meeting. He’ll be in front of investors again on April 26 for first-quarter results. It’s a reminder that even as demand soars for air travel and new jetliners, investors are still skittish. Before the issue was disclosed after-market on Thursday, Boeing shares had surged about 49% since November, when Calhoun said he was working to triple the company’s yearly free cash flow to $10b by the middle of the decade. Shares rose again April 11 when the planemaker announced first-quarter deliveries that beat rival Airbus SE, the first in nearly five years. On Friday, Boeing stock dropped 5.6% to $201.71, the biggest decline in more than six months. The new 737 problem involves two of the eight fittings where the jet’s vertical stabilizer is attached to the rear of its fuselage. A contractor, Spirit AeroSystems Holdings Inc., discovered that since 2019 two of its suppliers for the fittings — but not a third — had at times used non-standard manufacturing processes, according to Cai Von Rumohr, an analyst at Cowen & Co.<br/>
