Supply Chain Problems to Last Through Most of 2023: Boeing

US planemaker Boeing expects supply chain problems to persist almost until the end of 2023 due to labor shortages at middle and small suppliers and the sooner-than-anticipated return of demand.

“The shift from demand to now supply issues… is remarkable, the speed with which it happened… It has been a real issue for both manufacturers and will probably stay that way in my view almost to the end of next year,” said David Calhoun, CEO, Boeing, during Bloomberg's Qatar Economic Forum in Doha, reported Reuters.

Last month, Boeing said that production of its 737 aircraft had been slowed down by shortages of a single type of wiring connector. Meanwhile, some of Boeing’s airline customers had been forced to cancel flights due to a lack of staff. "It is a reflection of a crazy supply chain world that we live in right now," said Brian West, CFO, Boeing. "It is fairly localized and isolated, but we have options and we are working them hard."

Boeing’s complex supply chain faces problems when there are delays, said Calhoun: "The real issue is that we have a very large, sophisticated and somewhat fragile supply chain behind the airplane manufacturers and just as fragile are the operators themselves, the airlines and the ability to staff up with pilots, the ability to staff up the ground crews, the maintenance crews."

Regarding mid-tier and sub-tier aerospace suppliers, the largest restraint is the limited labor availability, added Calhoun. Attracting and retaining talent within the aerospace industry has always been challenging but it has proved especially difficult over the past few years due to the rise of high-tech companies in other fields, as reported by MBN. The shortage has put many companies in a fierce competition for the best talent.

Last month, jet engine maker CFM International, a company co-owned by General Electric and Safran, faced industrial delays of six to eight weeks due to supply chain problems and “some French labor unrest,” as reported by Reuters.

While planemakers do not assemble aircraft in Mexico, the most prominent players have a strong presence and suppliers in the country, such as Boeing, Bombardier, Airbus and Honeywell International, among others. The local industry focuses on the manufacturing, engineering and designing of aircraft parts and components for commercial, military and general aviation. Mexico’s aerospace sector grew from 100 manufacturing firms in 2004 to almost 400 in 2020, according to FEMIA.

Boeing is the main partner of the country’s legacy airline Aeroméxico, which has over 135 aircraft, including Boeing 737 NG, B737 MAX and 787-Dreamliner airplanes.