Boeing Closes Last 737 MAX Shadow Factory

Boeing has closed its 737 MAX shadow factory at Moses Lake, Washington. During the 20-month grounding of the 737 MAX after two fatal accidents in 2018 and 2019, the company continued to build aircraft before finally halting production, accumulating a peak of 450 aircraft in storage before they were re-certified to fly.  The final aircraft, after six years, was flown from the Moses Lake facility, where approximately 250 of the inventoried aircraft were stored, maintained, and updated as needed.

The Last Inventoried MAX is Out of Storage

The Moses Lake facility is the last of Boeing’s shadow factory facilities to close, indicating that Boeing

is well into its recovery from the quality crisis and the grounding of the MAX.  Earlier this year, China resumed deliveries of aircraft that were previously destined for Chinese airlines but had been unable to be delivered due to the global pandemic and political concerns from earlier this decade, clearing the last few remaining aircraft from inventory.

This is great news for Boeing, as the shadow factory can be dismantled and the experienced personnel and mechanics can return to Renton or to the forthcoming 737 MAX 10 line being built at Everett to support new aircraft operations.  From a financial perspective, those aircraft in inventory have shifted from being a cash drain to a source of revenue upon delivery, as the final payment before delivery is typically quite large compared to the progress payments.  The result is that Boeing’s last 737 MAX aircraft in inventory are expected to be delivered before the end of the third quarter, leaving only newly produced aircraft to fill the gap, which will improve cash flow timing.