Fire at Crucial Supplier Plant Threatens Boeing's Recovery Plan
A fire that struck a factory critical to the aerospace industry could threaten Boeing's recovery plan as the plane maker looks for an alternative supplier of fasteners.
In February, a fire that took several days to control broke out at an SPS Technologies factory in Pennsylvania. The facility, about the size of 10 football fields, developed, manufactured and supplied a line of fasteners. According to AeroDynamic Advisory Managing Director Kevin Michaels, the site provided nearly 15% of the aerospace industry's fastener supply.
The Wall Street Journal reported that Boeing CEO Kelly Ortberg said the company depends on SPS for many parts in its 787 and 737 jets but did not disclose the exact quantity or whether Boeing could access blocked inventory. Ortberg did, however, note that a parts shipment set for release before the fire became inaccessible.
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Boeing will now explore other sourcing options. But some parts that the company uses in landing gear, engines and other areas have complex designs and must be made to withstand air travel, the Wall Street Journal reports.
The incident comes as Boeing attempts to regain profitability after losing more than $35 billion since 2019. In November, the Journal reported that Ortberg said the company would not achieve positive cash flow until 737 MAX production reached 38 units per month. Boeing has made progress toward this goal by rolling out nine in December, about 20 in January and 35 in February.
The company also recently closed one of its two shadow factories, which would pull mechanics and engineers from their regular work to focus on maintaining and repairing old planes rather than building new ones.
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