The aerospace industry
As newly built 737s pile up in factories and car parks, the aerospace industry waits for Boeing’s bestselling plane to return to the skies. Fingers crossed
Boeing has long been a central cog of America’s industrial machine. Each year it sells $100bn-worth of aerospace equipment and services around the world and pays $45bn to other American firms. It is the world’s largest aircraft-maker and America’s largest manufacturing exporter. Its commercial jets, which account for 60% of revenues, ferry millions of passengers. One in 100 American workers toils either directly for Boeing, whose workforce numbers 137,000 in its home country, or one of its 13,600 domestic suppliers, which employ a further 1.3m people in mostly well-paid jobs. In short, what is good for Boeing is good for corporate America.
The flipside is also true, as has become obvious in the wake of two crashes of Boeing’s 737 max aircraft, in October and March, which have been linked to a malfunctioning flight-software system, and which killed 346 people. The human cost is immeasurable. The financial blow to Boeing itself, its suppliers and its airline customers is more tangible—and mounting.
The company has continued to churn out the troubled aircraft since its grounding by regulators in March. But it has not been able to deliver them to customers. As a result Boeing’s inventories have grown by $6bn so far this year. The flightless planes fill all free space at its facilities, including car parks. Add the knock-on cost for airlines and for the supply chain and a rough estimate is that every quarter that the bestselling airliner remains on the ground costs $4bn. As the bill spirals an entire industry is now willing the plane to be back in the air by the end of the year.