BOEING's planned comeback, already thwarted by reputational blows of 737 Max jet crashes plus stiff competition from Airbus, now faces a Covid-driven critical labour shortage among its suppliers,
The comeback rides on whether a Boeing factory south of Seattle can pump out 31 of its cash cow Max jets each month, a goal set for early this year.
The risk is that suppliers that ship millions of parts to planemakers and enginemakers won't be able to hire enough workers to keep pace.
Those smaller manufacturers are facing labour shortages two years after US aerospace companies jettisoned 57,000 employees. With an industry upturn looming, the crunch looks poised to get much worse.
Even after all the adversities Boeing has faced, "the next 18 months is more risky than the prior 18," said Kevin Michaels, managing director of consultant AeroDynamic Advisory.
If the labour squeeze means Boeing can't get the parts it needs, timed precisely to its production process, the company risks not only costly logjams but also the prospect of churning out scads of partially completed planes.
About two-thirds of suppliers surveyed by RBC Capital Markets say the ability to staff up is the biggest risk to the aerospace recovery. Mr Michaels estimates worker shortfalls of 10-20 per cent are common.
Concerns are particularly high for two foundries, Howmet Aerospace and Warren Buffett-owned Precision Castparts, which produce the lion's share of highly complex jet-engine components, like turbine blades able to withstand blast-furnace temperatures. The companies reduced headcount by 17 per cent and 40 per cent respectively during the downturn.
"The production rates that we'll see over the next two to three years will be determined more by the supply chain's ability to execute and finance growth" than air travel demand, Mr Michaels said.
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