Boeing's been dropping hints since last fall that it could raise the production rate for its popular 737 airliner to 42 a month, a record pace. Now that hint is coming from high up the corporate ladder.
Boeing Chief Financial Officer James Bell this week told Wall Street analysts that the company was studying its production capacity for the single-aisle plane with an eye toward dialing up the production rate to 42 monthly.
That rate now stands at 31.5 a month, but Boeing last year announced two production increases that will raise the assembly pace to 38 a month by early 2013.
The Renton plant where all 737s are built has three production lines, two of them dedicated to commercial production of the 737 and one to military variants of the twinjet.
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The main production line is now producing 21 monthly with the second commercial line producing 10.5 a month. If the second line assembly rate is brought up to the same pace as the first line, a 42-planeper-month production would result.
Raising the production pace isn’t simply a matter of hiring more workers in Renton. It requires advance planning all along the supply line from the smallest supplier upward.
Boeing could raise the production pace even further if it decides to mix military and commercial 737s on the third production line. The company is now building maritime reconnaissance aircraft on that line. Those aircraft are based on the 737 but equipped with advanced detection gear and weaponry to attack submarines.
Raising the 737 production pace could help Boeing pay the billions in extra expenses it has incurred in creating its oft-delayed 787 Dreamliner. The first commercial deliveries of that plane are now set for the third quarter this year, more than three years late. Some aerospace experts are predicting that Boeing won’t make any money on the 787 until it has produced 1,500 of the medium-sized composite-bodied aircraft.
The 737, on the other hand, is a cash cow for Boeing. The more it produces, the more profit falls to the bottom line. At present production rates, Boeing has a five-year-backlog of orders for the plane.