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Boeing Grapples with Quality Control Issues on 737 Max Jets

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Ticker Tea
February 05, 2024

đź“ť SUMMARY: Boeing Co. ($BA) is addressing a new quality-control issue involving approximately 50 undelivered 737 jets, where rivet holes were drilled incorrectly. This problem, identified by a worker at one of Boeing’s suppliers, could lead to delays in near-term plane deliveries. Stan Deal, CEO of Boeing Commercial Airplanes, emphasized the company's commitment to delivering flawless airplanes, despite the setbacks this issue may cause to their production schedule.

The exact supplier wasn’t specified, but Spirit AeroSystems Holdings Inc. ($SPR), known for constructing most of the 737 Max's fuselage, acknowledged the issue and committed to conducting necessary repairs. This latest defect adds to a series of manufacturing lapses at Boeing, the most concerning being a near-catastrophic panel blowout on an Alaska Airlines 737 Max last month. In response, the Federal Aviation Administration (FAA) has increased its oversight of Boeing's manufacturing and supplier systems, even capping 737 production until quality standards are met.

Deal reassured in his memo that the rivet hole issue does not pose an immediate threat to flight safety, and all 737s can continue to operate safely. However, the persistent problems with unfinished work, whether from suppliers or within Boeing's own factories, have caused frustration among employees and disruptions in the production line. To mitigate this, Boeing has instructed a major supplier to halt shipments until all work is satisfactorily completed.

This decision, while impacting the production schedule, is expected to enhance the overall quality and stability of Boeing's aircraft manufacturing process. The company's approach reflects a shift towards prioritizing quality over speed in production, aligning with regulatory demands and ensuring safer operations. As Boeing navigates these challenges, the focus remains on upholding stringent quality controls to restore confidence in its flagship 737 Max jets.

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