Leonardo cuts production of 787 fuselages at Grottaglie

The recent temporary rate cuts on the Boeing 787 due to continuing safety issues and inspections has resulted in repercussions in the supply chain across the ocean.  Leonardo, who build two sections of the 787 fuselage in Italy, has temporarily suspended its operations in its Grottaglie facility, as the companies now have adequate inventory to manage the new 3 aircraft per month rate, cut from the current 5 per month level.  Boeing expects this to be a short-lived situation, and Leonardo’s cuts are scheduled to last four months.

In the US, it is easy to cut staff, but not so in Europe.  As a result, employees could be transitioned within the division to other facilities, and a redundancy fund has been opened for a maximum of 4 months to ensure continued employment.

Boeing

has projected growing the 787 rate to 7 per month in January, 2025 growing to 10 per month by the end of 2025.  Of course, this is subject to the FAA, which is now more closely monitoring 787 production.  With Boeing’s recent performance not meeting expectations, we are skeptical of the rate tripling from 3 per month to 10 per month in an 18 month period.  We do, however, expect the rate to increase to 5 per month before the end of the year.