Boeing’s 737 Max crisis may cost it the upper hand with its suppliers

CHICAGO - Boeing Co. CEO Dennis Muilenburg has called the crisis surrounding the company’s 737 Max jet a “defining moment” that will ultimately make the planemaker stronger and better. It also may turn out to be a defining moment for Boeing’s suppliers, one that has the potential to shift the balance of power back in their favor, writes Brooke Sutherland for Bloomberg. Continue reading original article

The Intelligent Aerospace take:

May 31, 2019-Sutherland notes that because large commercial passenger jet customers aren't exactly flush with choice - it's Boeing or Airbus - Boeing hasn't taken a giant dip in the stock market. However, she writes in her opinion piece that larger suppliers like United Technologies may feel now is the time to push back against Boeing's cost-savings initiatives (i.e. paying less money to its partners and chewing into their bottom lines) and fight for higher prices on the components it supplies.

Sutherland notes that Boeing may instead just double down on putting the squeeze to companies like UT in an effort to offset costs with having the Max grounded for months.

"We may not know for years which way the pendulum swung, but the continuation of Boeing’s grip over the aerospace industry shouldn’t be seen as a foregone conclusion," Sutherland says.

Related: Boeing sends 737 Max to brand rehab to avoid fate of Ford Pinto

Related: Canceled flights, swapped planes: How Boeing 737 Max's grounding hits airlines and passengers as summer vacations loom

Related: FAA reportedly didn’t review crucial safety assessments of Boeing 737 Max system before fatal crashes

Jamie Whitney, Associate Editor
Intelligent Aerospace