According to the news report by Reuters, Boeing Co. is pulling in its retired workers back to work as the world’s biggest airplane manufacturer attempts to fix issues with missed timelines at its plant outside Seattle, in Renton, Washington. The news was given by a union official on Monday to Reuters. This plant makes the company’s 737 jetliners.
After meetings in the Seattle area last week, analysts feel that these delays could hurt the company’s third quarter results and could also threaten Boeing’s target of increasing its built rates in 2019. In June, Boeing increased production to record levels, which is what led to the current shortages in engines and fuselages.
Boeing is expected to release its order and delivery report for the month of August, which will give investors about how badly off the company is in terms of its targets versus actuals. July was the month that the company’s deliveries were at their lowest levels in many years.
Which is why investors are eager to see August’s numbers. Deliveries are the key to airplane makers’ revenues as that is the time that airlines pay them most of what is owed to them for their aircraft.
According to Connie Kelliher, the spokesperson for the International Association of Machinists and Aerospace Workers, Boeing reached an agreement with their union on August 15, after which the company was allowed to hire retired mechanics as well as inspectors temporarily.
Kelliher also stated that this was not the first time that the union and Boeing had reached such an agreement. Last autumn, following a spate of voluntary layoffs, Boeing hired retired workers to cover the gap.
Boeing’s spokesperson, Paul Bergman, stated that this step was being taken so that additional resources could be dedicated to the Renton, Washington plant so that they could ensure timely deliveries of aircraft to their customers.
According to analysts, the airplane maker had already deployed an extra 600 employees as well as new hires at the Renton plant in the last few weeks to address this issue. Currently, it is not known how many retired workers have been hired to fill the remaining gap.
Reuters reported in July that there were a number of semi-finished 737 jetliners at the Renton site. However, this time, analysts said that number has gone up several times to about 50.
Boeing stated that this was because of a shortage of fuselages from its supplier Spirit AeroSystems Inc. Additionally, they were short on engines also, which are supplied to the company by CFM International Inc., a joint venture between the French company Safran and General Electric.
Bergman stated that Boeing was working closely with both suppliers as they were getting back on track. He said that the company was also keeping all the customers in the loop about what was going on in terms of mitigating delays. Bergman stated that Boeing was still building 52 airplanes every month despite all the roadblocks they have faced.
CFM confirmed that it was working towards fixing all its issues so that the delays would be taken care of by the end of this year. Spirit, on the other hand, was not available for comment.
Among the airlines that buy Boeing’s 737 jetliner, American Airlines Group Inc. stated that it has experienced slight delays in the delivery of a few 737 MAX jetliners. Southwest Airlines Co., America’s 4 largest carrier, confirmed that it was going to see minor changes on future Boeing 737 deliveries, however, these changes have not impacted the company’s flight operations.
Air Lease Corp.’s spokesperson, Laura Woeste stated that they were still experiencing delivery delays of less than one month.