Questions loom over Japan quake impact on Boeing production ramp-up

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Infrastructure issues in the wake of the 9.0 magnitude Japanese earthquake continue to leave questions hanging over Boeing's Japanese supply chain supporting its company-wide production ramp-up, says its vice president of airplane programmes, Pat Shanahan.

He says it is too early to tell if the longer term effects of the quake will force Boeing to slow its coming production ramp ups.

The 11 March quake left no structural damage to Kawasaki, Mitsubishi and Fuji Heavy Industries in Nagoya, far from the northern part of the Japanese archipelago, which sustained far greater damage, says Shanahan. However, he adds: "The hard part to unravel is what part of the lower tier subcomponent details or just the logistics, so I think that's something that's hard for us to inspect."

He says rolling blackouts due to electricity shortages are causing suppliers to move personnel away from the periods when no power is available, providing a level of predictability because "they at least know when the power is down".

"Right now, we can go into the factories," he adds. "We can check the tools, we can check the bins, we can check the inventory, but how about getting stuff out of the ports, how about getting stuff here in country, so I think that has a little bit to play out. Everybody is doing a lot of evaluation.

"What you don't know is the internal infrastructure, how does gas, some of these basic necessities play into this," says Shanahan.

"Until we really know what the situation is, it's hard to make the call" on any impact to Boeing's coming production ramp up, he adds.

Boeing is currently moving from 31.5 737s to 35 per month in early 2012 followed by 38 in the second quarter of 2013, from two to 10 787s per month by the end of 2012, seven to 8.3 777s per month by the first quarter of 2013, 1.5 to two 767s per month in mid-2011, and 1.5 to two 747s per month in 2012.