Boeing Shares Climb as 737 MAX Production Resumes After Strike-Induced Halt

Boeing has successfully restarted production of its 737 MAX aircraft following a 53-day halt caused by a labor strike. The significant pause in operations stemmed from over 33,000 factory workers walking out in protest of contract negotiations. The halt impacted Boeing's production just as the global demand for air travel continued to rebound, making the restart a critical step in Boeing’s strategy to regain its footing in the market.

The company delivered nine 737 Max planes in November, alongside two 787 Dreamliners and two 777 aircraft. These deliveries were completed from existing inventory that predated the strike. Boeing has resumed full operational capacity at its 737 production line in Renton, Washington. However, the production lines at Everett, Washington, for models 777, 777X, and 767 remain on hold, although revivals are anticipated soon.

Challenges persist for Boeing as it works to stabilize its production pipeline. The recent strike necessitated the recalibration of tools, restaffing, and retraining of workers—all under the purview of newly appointed CEO Kelly Ortberg. Despite these hurdles, Boeing aims to streamline processes and mitigate risks associated with the phased reopening.

Around 4,200 outstanding orders for the 737 MAX underscore the scale of Boeing’s future commitments, though production is presently constrained to 38 aircraft per month due to regulatory caps. These restrictions were implemented following a safety incident with an Alaska Airlines 737 MAX 9 earlier in the year, when a door panel detached mid-flight. The FAA has not yet provided a timeline for when these restrictions will be lifted.

Looking ahead, analysts project that Boeing will face formidable challenges in scaling production back to pre-strike levels due to ongoing issues in the supply chain and regulatory examinations. The company's ambition is to eventually reach a production rate of 56 planes per month, though this goal remains aspirational amid existing constraints.