Table of Contents
Boeing's ongoing production issues are causing uncertainty in its supply chain, with suppliers struggling to keep up with fluctuating production rates and the cost of excessive inventory. The slowdown in manufacturing the 737 Max is challenging an already strained aerospace supply chain, which has been dealing with price cuts and inconsistent production due to the Covid-19 pandemic and two fatal crashes that grounded the Max worldwide. The Federal Aviation Administration has limited Boeing’s production of the Max to 38 per month, but the company is currently producing fewer than that. Suppliers, some of which are publicly listed companies with market capitalizations in the billions, are feeling the impact, particularly those that do a significant amount of business with Boeing. The production issues at Boeing are also affecting its main rival, Airbus, which is ramping up production to meet demand from airline customers. The production slowdown at Boeing comes after a turbulent first quarter for the company, and could further exacerbate the situation. Meanwhile, Boeing’s employees speaking up on safety and quality soared 500% after the 737 MAX incident. The ongoing production issues could potentially impact the company’s efforts to rebuild trust with its employees and customers. Boeing’s stock closed at $175.08 on Tuesday.
){kind=link}