What’s next for plane manufacturing after Boeing 737 Max 8 fallout?
Tuesday, April 09, 2019
Airplane safety statistics remind us accidents are extremely uncommon. 2018 saw a slight increase from 2017 in plane crash deaths globally. According to the Aviation Safety Network (ASN): "The ASN recorded a total of 15 fatal airliner accidents in 2018, leading to 556 deaths, compared with 10 accidents and 44 lives lost in 2017, the safest year in aviation history."
Then on March 10, a Boeing 737 Max 8 plane crashed in Ethiopia, killing 157 people. This happened only months after the same type of plane went down in Indonesia, killing 189 people. This leaves much cause for discussion regarding Boeing and Federal Aviation Administration (FAA) complicity in the accidents.
Was the 737 Max 8 rushed to market, resulting in hundreds of deaths? Crash victims’ families are filing lawsuits while the Justice Department probes the 737’s FAA certification, given the model’s deadly faults.
The plane manufacturing world has been rocked, possibly causing "the first decline of corporate earnings since 2016," according to Reuters.
The official word is that pilot error is not the cause of the Ethiopian crash, so Boeing must recognize its manufacturing culpability. Boeing’s CEO has apologized for the crashes while rumors circulate the model’s anti-stall system software’s "faulty sensor readings" is to blame.
The FAA’s response was to ground its 737 Max 8 planes until further investigation. Boeing’s usual 737 Max 8 production has been cut by 20 percent, negatively impacting the aviation world.
For example, American Airlines has cancelled 90 flights through June 5. Southwest Airlines also flies these grounded planes, and its current plan to retire a fleet of old planes might be delayed due to recent events. The company just announced a week delay in its 737 pullout.
While production is scaled back, it looks as if some parts production will continue, impacting workers less, according to Moneycontrol.com: "two main suppliers of Boeing, CFM International and Spirit AeroSystems Holdings Inc, indicated that they would continue their operations at record pace regardless of Boeing's plans."
Renton, Washington; and Wichita, Kansas, are two manufacturing cities with Boeing-related workforces. Renton is Boeing’s main production hub, while Wichita houses Spirit AeroSystems, which manufactures shipset parts.
Spirit AeroSystems has stated that it will continue to produce its usual number of 52 shipsets for later use in the 737 Max 8 planes. General Electric makes Boeing LEAP jet engines, and also reports it will maintain its usual production plan of 5 percent overall engine sales to Boeing.
The prevailing assumption is that parts suppliers, all the way down to factory workers, will not face layoffs since routine production levels are maintained.
Some Boeing suppliers even anticipate potential benefits from the 737 groundings. Heico Corporation, for example, supplies engine parts. If older plane models are flying due to the 737 Max 8’s grounding, they will need parts, maintenance, and servicing — thus increasing demand in some areas.
But there may not be a silver lining on this cloud. One recent editorial in Bloomberg challenges suppliers plans to maintain production levels without losing money: "The longer the grounding lasts, the more unlikely it is that suppliers will emerge from this debacle unscathed. They risk losing revenue from lower demand and cash-flow hits should their investments go unneeded."
Prior to the March 10 Ethiopia crash, Boeing planned to increase 737 production levels. Machinist unions were already irked by recent "quality transformation" changes that automate manufacturing — with "precision machining" and "robotic riveting" — and streamline quality assurance processes. Quality inspections, conducted by skilled shop floor machinists, may be reduced in the process.
The union acknowledges "current employment levels will be maintained" despite production setbacks. Pilots’ and flight attendants’ unions have voiced concerns about the 737 Max 8 planes’ overall safety.
The recent crash has more people listening, watching, waiting — and perhaps changing those early summer vacation plans, too.
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