Boeing boosting 737 production to unprecedented level

To meet booming demand for single-aisle jets worldwide, Boeing announced today that it plans to step up production of its 737 jetliner to 42 planes per month by the first half of 2014. That’s an unprecedented production rate for a Boeing airliner — an average of two 737s each workday and nearly 500 airplanes a year. Together with planned increases in widebody jet output as the 787 Dreamliner begins deliveries, if all goes according to plan this 737 rate hike will boost Boeing’s total annual airplane production in 2014 to almost 770 jets. Last year Boeing built 462 jets. The historical peak production was in 1999, when Boeing’s Puget Sound area factories rolled out 561 airplanes. The 737 program currently produces 31.5 airplanes per month. Boeing had previously announced a plan to go to 35 per month in early 2012, then 38 per month in spring 2013. In addition, a military version of the 737 for the U.S. Navy, the P-8, will roll out from a separate line at a rate of up to 2 per month within a few years. The increased output of commercial 737s likely will require hundreds of new workers at its Renton, Wash., plant, where Boeing employs about 10,000. The pent-up demand from airlines is driven by increased profitablity in the industry, coupled with a need to replace older jets with more fuel-efficient airplanes because of rising oil prices. Boeing has steadily improved the fuel efficiency of the 737 over the years. Performance tweaks to the engines on airplanes delivered beginning next month should improve fuel efficiency by another 2 percent, the company said. 737 Program vice president Beverly Wyse offered assurances that Boeing’s supply chain can keep up with the hectic maufacturing pace ahead. In 1997, Boeing raised 737 production rates in Renton to 10 per month, from 6, and aimed to go higher. The supply chain seized up and the assembly lines ground to a total halt for a month. Deliveries sputtered for more than a year and Boeing lost billions of dollars. Avoiding a similar disaster this time around is a top priority of Boeing management. “We have worked very closely with our supply chain … to ensure we can increase rate in an efficient and responsible fashion,” Wyse said. She said “Many of the capital investments and production system changes made for 38 airplanes per month will already position us to build 42.” “We are very well situated for this rate increase.” The dramatic production rate requires the Renton plant to step up as well. Of the two commercial 737 assembly lines there, one is now rolling out 21 airplanes a month. It’s a lean moving assembly line with six assembly positions. The second parallel line, which is slightly shorter at just five assembly positions, is rolling out just 10 a month. To get to 42 in total, the plan is to boost that second line’s output from 10 to 21, matching the first line. On a recent tour of the assembly lines, Erik Nelson, deputy operations leader in Renton, said that entails repositioning some major tooling to effectively make the two lines the same length. That work is already underway. Boeing rival Airbus is facing similar strong demand for its rival A320 jet, and it is boosting production rates even higher and more quickly. Airbus currently cites a production rate of 36 a month now. That’s scheduled to increase to 38 in August, to 40 in early 2012, then 42 by the end of 2012. However, Wyse said those figures aren’t fully comparable since they are based on the French 11-month work-year calendar — the Airbus final assembly plants essentially shut down in August. Allowing for that, Airbus’s current annual A320 output is closer to 33 per month, set to rise to 38.5 by the end of 2012. Both jet makers are also contemplating the future beyond the current single-aisles. Airbus has committed to put new, next generation engines on its A320 by 2015. Boeing is still pondering its strategy for the 737. But however that goes, work at Renton at least through the next five years will be booming as never before.