Boeing Strike Delays Deliveries Further

The magic word recently is STRIKE! Not just one, but two. As has been widely reported, 33,000 Boeing factory workers in the Puget Sound area (as well as some in Portland) went on strike on the 12^th of September shutting down production of the 737, 767 and 777 models. Then, on September 23^rd, 5,000 Textron workers in Wichita, affecting the Cessna and Beechcraft lines of aircraft. As of the end of the month, neither of the strikes had been resolved. Both Boeing and Textron offered contracts that didn’t come close to what union members wanted, and in both cases management and labor appear to remain far apart. Despite public statements to the contrary, it appears both sides of both disagreements have set themselves up for a protracted pause. How protracted? Based on the analysis we’ve conducted, we’re expecting somewhere in the region of two months.

With the expectation of a two month pause we’ve made a few adjustments to the affected Boeing and Textron production forecasts.

On the 737 MAX, we’ve cut, yet again, our delivery forecast for 2024, this time by 60 aircraft. In addition, given all the murmurings we’re hearing from the supply chain, not to mention the FAA, we’re increasingly skeptical about how fast Boeing can ramp back up, and we have cut our expectations for deliveries for as far out as 2030. As is our custom, we haven’t changed the 10-year total number yet, but since this leaves the balance to be made up at the end of the forecast period, we think that exposes the MAX to a lot of longer-term downside risk. We’ll address that issue when we release our next 10-year forecast in January 2025.

Given the relatively modest production numbers of the other Puget Sound models - 767-300F, KC-46, and 777F - we’re expecting reductions of two or three aircraft per model that will be made up in the following year or two with no change in the 10-year number. As for the 777X, we projected last month that first deliveries of that program would be delayed by half a year; the strike adds risk of even further delay but for the time being we’re sticking to our earlier view. With 787 production fully moved to North Charleston, we’re not projecting any change to that program’s deliveries.

As for Textron’s Wichita models, we had been expecting 2024 deliveries to total 237 across the seven different models we forecast: six Citations and the Beech King Air. We see this number coming down to 212 in 2024, with no change in our 10-year figures. We expect that deliveries not made in 2024 will slip to 2025 which in turn will bump a few into 2026.