Boeing CFO Brian West commented that although the company was not changing its target of 400 to 450 deliveries of the 737 aircraft, due to the production issues, he expects deliveries to be “at the low end of that range”.
Speaking at an investor conference hosted by financial-services firm Jefferies, West referred to the previously disclosed problem during production to the 737 aft pressure bulkhead caused by incorrectly drilled holes by supplier Spirit AeroSystems. He said that the company knows how to fix the problem that impacts “about 75% of the 220 airplanes that were inventory as of the end of the second quarter” and that the company recognises that “in the near-term” this issue will impact deliveries stressing that there was no need to change the master schedule. “We have got literally armies of people from Boeing and the supplier working on this issue and to drive stability in their factory,” said West, admitting that this was frustrating for customers, investors, and Boeing teams.
West referred to the strong demand for aircraft, and that he was proud of the company’s order performance so far during the year despite also noting that the production issue and some higher costs would push BCA margins into negative territory during the quarter.