Boeing Strike Creates Production Challenges for 737 MAX Amid Worker Unrest

Over 30,000 Boeing factory workers on the U.S. West Coast began a strike on Friday, impacting the production of the 737 MAX and further complicating the planemaker's supply chain. CFO Brian West discussed the challenges posed by the strike and highlighted ongoing issues within Boeing's defense and space unit.

Over 30,000 factory workers for Boeing on the U.S. West Coast initiated a strike on Friday, which is expected to hinder the company's ability to meet its 737 MAX production targets and stabilize its supply chain, according to CFO Brian West. The work stoppage follows a rejected contract deal as workers demand higher pay.

During the Morgan Stanley Laguna Conference, West stated that third-quarter margins for Boeing's defense and space unit are expected to remain negative, mirroring the previous quarter. This strike, the first since 2008, comes at a critical time as Boeing faces scrutiny from both U.S. regulators and customers following a door panel incident on a 737 MAX jet in January.

West emphasized that while Boeing had made strides towards their production goals for the 737 MAX, the strike introduces new challenges that could extend the timeline. The disruption has also increased uncertainty for suppliers struggling to align their production with Boeing's fluctuating forecasts. As a result, Boeing plans to halt part intake from suppliers with sufficient inventory for non-strike-affected programs like the 787, produced in South Carolina by a non-unionized workforce.

(With inputs from agencies.)