CEO Warns that Boeing’s Reduced MAX Production Will Impede Company’s Recovery

Boeing’s CEO Dave Calhoun announced on Wednesday that the company’s lower 737 MAX production will slow its recovery process following a mid-air blowout incident in January. Calhoun emphasized the importance of prioritizing safety and quality over financial considerations during this challenging period.

Despite the difficulties, Boeing is starting to see improvements in the efficiency of its 737 factory, with more stable cycle times expected in the future. However, the company is facing challenges with supplier shortages for its 787 widebody jets, which could further impact production and deliveries.

The Federal Aviation Administration has imposed restrictions on MAX jet production and mandated Boeing to address systemic quality-control issues after the January incident. This has led to a decrease in output and a delay in achieving financial goals outlined for the coming years.

Boeing’s CFO mentioned the need for more time to reach a target of $10 billion in annual cash flow by 2025 or 2026. The company’s quarterly revenue has already seen a decline, with a 41% drop in 737 deliveries compared to last year.

Despite these setbacks, demand for new planes remains high, indicating a positive outlook for the aviation industry. Boeing is working towards delivering its existing inventory by the end of the year to generate much-needed cash flow. The company also aims to improve the performance of its defense business, which has been facing losses in recent quarters.