What reaching rate 38 means for Boeing

Reports coming out of Seattle indicate that Boeing finally reached its FAA mandated maximum output for the 737 MAX of 38 units in May, or rate 38.  Reaching that rate, and maintaining high scores on six key performance indicators of quality, will determine when the FAA enables Boeing to take its next incremental step to 42 aircraft per month.

Reaching that rate is the first step in Boeing’s financial recovery.  The 737 MAX program needs higher volume rate 38 per month to break even and stop the bleeding of cash flow that began with the initial safety issues with the airplane and were compounded by the global pandemic and management failures at the company.  Boeing, prior to Kelly Ortberg coming in as an outsider, was unable to focus on quality and manage supply chain constraints in the wake of the global pandemic.