Thursday, October 2, 2014

5+2=7(737), or numbered as 52 or times Its Own Numbers =10 more a month

It was a fine year to be born in 1952. My lucky number, then Boeing announces it will build 52, 737's a month going forward 4 years ahead of myself. Numbers are an important thing for bean counters, as I have served in that capacity as well. 52 X's 12 = 624 Max and NG's a YEAR. Everybody knew it was coming. Workers told their children to get a machinist skill in the Renton, Wa area, several years back. There is a future right here in Renton Town. I once went to trade school in Renton and know the clamor going on way past the Job service doors. Its called getting ready for the next great push in aviation. Young folks, get your google on, and learn more technology. You have a Job coming near your rainforest soon. Or move to the plains and join "Spirit". Good Move/!

So here is the low down on the low down. I doing this feature on the cheap and will link you to the news.

Boeing To Raise 737 Production Again By 2018

"Boeing has announced plans to raise output of 737s beyond its current production plans, saying global demand for new aircraft justifies it.
The move to build 52 737s a month in 2018, from 42 currently, while widely expected, shows Boeing's confidence that its factory and its network of suppliers can step up to the rate for Boeing's single-aisle jet.
The increase will push production of 737s to 624 a year in 2018, almost matching the 648 the company delivered last year across all four of its main models."
While many suppliers will be able to meet the higher rate, they fear the increase won't last more than a couple of years, not long enough to justify the costs of increasing their capacity, said Ken Herbert, an analyst at Canaccord Genuity who recently surveyed about 45 companies that supply Boeing.
"It is not ideal from a supplier standpoint because of the capital investment required and the negative financial implications of then taking rates down," he said. "This significantly increases the risk, in the eyes of the suppliers."
Suppliers are concerned this is an airplane building bubble number, and are hesitant to increase its own supply chain capabilities just to have Boeing soften the supply chain quantities only a few years after implementing the production increase.
Point well taken.

Boeing laid the groundwork with its Asia conference last month when it said Asia will need about 6,012 new aircraft over the next 20 years. Most of those will be single aisle types. The second key point, is that Randy Tinseth was only speaking about Asia, and not the world market in total. To know the world forecast of that market is key for the supplier. Boeing is betting on a rush of single Aisle sales in the next five years as airline place holders, for timely deliveries for the world wide demand. Asia is just getting into the order fracas sooner rather than later. Somebody will have to make those parts for either Boeing or Airbus. This next bubble will be one with duration. Those who blink will be unprepared in the supply chain. Here are a few Pondering Points:
  • World demand is not exclusive to Boeing
  • The order rush has not fully yet begun
  • The current rush, is for place holding for fleet renewals, and not fleet increases.
  • Fleet Increase Orders are now on the horizon ready to pad the order book.
  • Supplier Expansion Risk is ready for Reward during this next decade.  

Boeing is expecting or is tendering new orders for the Max in 2015, and has a certain expectation for the next four years for what its going to do in the single aisle market. It too, does not want to increase capacity by 20% if it doesn't need to do so. Suppliers should, after careful review, increase capacity for its Boeing customer, as it realizes it could gain advantages for or with both mega builders in Europe and the US.
In conclusion, the suppliers are watching both the NEO and Max once it flies in tests, then they will know how they will expand, and for whom they will be expanding.