Suppliers to Boeing Co. are struggling to navigate uncertainty arising from the continued grounding of the company’s 737 Max aircraft.
Reliant on Boeing orders, executives of the 600-plus companies that supply more than 3 million parts to make the beleaguered jet are bracing for potential changes to production levels should the aircraft remain grounded beyond the summer. Boeing BA, -0.46% in April reduced its monthly production rate of the jet to 42, down from 52 before the second fatal crash of a 737 Max in five months on March 10 in Ethiopia.
Boeing last week said it would go through its list of suppliers and components one by one and make adjustments if necessary. That might make suppliers — who provide parts from fan blades to fuselages — reconsider their risk-management strategies and growth plans, given that Boeing before the crashes had indicated it could boost monthly production to 57 planes later this year.
A production rate increase with short notice could be just as disruptive as a cut. “It is not an easy supply chain to switch on and off,” said Douglas Groves, chief financial officer and treasurer at Ducommun Inc. DCO, +1.64% , a Boeing supplier that makes wing flaps, also called spoilers; floor panels; and pylons for the 737 MAX. “Once you turn it off, it takes a while to turn it back on.”
An expanded version of this report appears on WSJ.com.
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