Boeing’s 737 ramp-up shows signs of strain as unfinished planes pile up in Renton

Supply chain problems are causing production delays at Boeing’s Renton assembly plant. Unfinished 737s are parked on much of the available space at the adjacent airport and all around the plant, including along the Lake Washington waterfront.
(Greg Gilbert / The Seattle Times)

After several years of reaching higher and higher 737 production rates, Boeing’s ramp-up in Renton is showing signs of severe strain.

More than 40 unfinished 737 jets are stacked around Boeing’s Renton final assembly plant and along the edges of the Renton Municipal Airport, many missing their engines and others awaiting installation of a variety of parts.

The pile-up of planes comes just two months after Boeing raised the hectic pace of production one more notch from 47 jets per month to an unprecedented 52 per month.

Boeing says it’s driven largely by the lingering effects of previous delays in deliveries of jet engines and fuselages from two major suppliers.

A shortage of highly skilled labor is also a factor as Boeing struggles to build more and more of these planes even as many experienced workers last year retired after taking the voluntary buy-outs the company offered.

Boeing says it has temporarily re-deployed to Renton “several hundred” workers from around its Puget Sound facilities, including many from its KC-46 tanker program in Everett, to assist in clearing the logjam of planes. The company has also been aggressively hiring over the past few months, with many of the new hires pegged for work in Renton.

The 737 is Boeing’s cash cow jet. It brings in about half its commercial airplane revenue and provides the funds for its development of new airplanes. Boeing has successfully transformed production using highly automated manufacturing equipment.

But it’ll have to clear this current drag on the 737 ramp-up before it can increase production even further, a move seen as crucial to delivering the cash flow Boeing has promised.

The company has announced plans to go to 57 jets per month next year, and just last week chief executive Dennis Muilenburg reiterated his belief that 737 demand is creating “upward pressure” to go even higher.

Late engines and fuselages

Since early in the year, LEAP-1B engines for the new 737 MAX model made by CFM International have been arriving weeks late. Likewise, 737 fuselages supplied by Spirit AeroSystems of Wichita. Kan., have been arriving late in Renton.

Yet Boeing has until now insisted that the impact on production has been minor, and has resulted in no late deliveries of airplanes to customers.

However, this may simply be because with fuel prices rising and an excess capacity of aircraft in many markets, many airlines may be content to push out their delivery dates. It’s now apparent in the stacked-up unfinished airplanes that the impact is considerable.

Boeing spokesman Doug Alder conceded in an interview Thursday that the company has had “to be a little creative with parking around the factory” because of unfinished planes.

Alder said the impact of the engine and fuselage delays is now at its peak.

He said that when a fuselage is late, it affects the entire production system, which pulses forward on a moving line, currently set for building 52 jets per month. That means some jobs may be postponed and in the end a plane leaves the assembly line with some of the required work unfinished.

Alder said that with the extra manpower deployed, “by the end of the year, we’ll be back on our plan.”

According to one Boeing Renton worker, it’s not just the engines and fuselage — other more mundane parts are also arriving weeks late.

“Vendors can’t keep up with the new production rate,” said the worker, who cannot be identified because he spoke without company permission. “They are behind in deliveries. A wide range of parts, from electronics modules to flight deck interior pieces, are SOS – Stores Out of Stock.”

Alder said any other such parts shortages are not outside the norm and are not responsible for the build-up of unfinished jets.

“It’s the cumulative effect of the engine and fuselage delays that’s causing this peak,” he said. “The other things we work on a daily basis.”

“The main driver (of the unfinished work) continues to be Spirit and CFM, and they continue to track toward their recovery plan,” he added.

On Wednesday, Spirit AeroSystems CEO Tom Gentile said on the company’s quarterly earnings teleconference that although 737 fuselage deliveries have picked up, “we’re still not getting consistently everyday fuselages out.” He said this will be fixed in the second half of the year, and said he’s very confident Spirit will fully meet its delivery requirements by year end.

At a briefing at the Farnborough Air Show last month, top CFM executives said they are only “a few weeks” behind schedule in deliveries to Boeing and catching up.

Jet logjam

Teams of mechanics are busy on many of the jets parked out on the airport ramps. Rather than pulling them back into the factory for completion, the Renton worker said they are “out on the field trying to clean up the behind-schedule jobs and get those planes in shape” for delivery.

The planes are stationed not only on the normal parking aprons around the Renton airport but also on the pier along the southern edge of Lake Washington, and are even parked in spaces between the main buildings on the Renton site.

The Renton worker said Boeing has done a study to see if it’s feasible to temporarily convert a Boeing employee parking lot north of the Renton School District stadium into a parking spot for more airplanes. It’s unclear if that will go forward.

This week, the pile-up of airplanes spilled onto the Renton airport taxiway that runs parallel to the runway, closing the taxiway for almost half its length. Because of the taxiway closure, the airport authorities notified pilots they should seek two hours’ prior permission before landing a large jet on the runway.

On Wednesday, 25 airplanes were parked around the edges of the public airport, nine of them missing their engines, with heavy blocks hanging from the wings in their place.

In a further sign of their incomplete state, almost all were not yet painted in the livery of the airlines that have bought them. Nevertheless most could still be identified by the tail rudders, which are painted during the assembly process.

The planes without engines were all the new model 737 MAX, which are powered by CFM’s new LEAP-1B engines. These included 737 MAXs for American Airlines, China Southern, Lion Air and Southwest Airlines.

An engine-less Turkish Airlines 737 MAX was parked on Taxiway B. By Wednesday night, another plane had joined it on that taxiway.

According to workers, 17 or 18 more 737s are tucked into every available space around the assembly plant.

“Now that whole front of the lake is full of planes, over to the bridge on the north end of the runway, and between the buildings,” the Renton worker said. “They are literally all over.”

He said Boeing has also put engines on some planes, flown them to Boeing Field in Seattle just to get them parked out of the way, then taken the engines off and returned those to Renton. As new engines are available, those planes will be delivered to airlines from Seattle.

Two workers said that a lack of experienced workers is exacerbating the problem. One said that though Boeing is hiring new people, the new hires need to be trained — and “most of the trainers are out on the field trying to catch up.”

Many among Boeing’s older blue-collar workforce took “voluntary lay-off” packages to retire early last year.

“It’s a combination of everything,” the Renton worker said. “The lay-offs, the production ramp up, the inexperience. It’s the perfect storm. It’s happening right now and it’s getting worse.”

(Dominic Gates - The Seattle Times)