Boeing plans to add a fourth 737 Max production line to meet demand

Boeing said it plans to add a fourth 737 Max production line in the second half of next year as it targets higher output of its best-selling plane, an executive told staff on Monday.

The new line will be housed in Boeing’s massive Everett, Washington, factory, where it has been reworking some of its 787 Dreamliners and producing 777s and 767s. Until December, it had also been producing the 747 jumbo jet there.

“This undertaking is significant,” Stan Deal, CEO of Boeing Commercial Airplanes, said in a note to staff, which was seen by CNBC. “In addition to preparing the facility, we have begun the process of notifying and preparing our suppliers, customers, unions and employees as we take the necessary steps to create a new line.”

Boeing has been eager to increase production of the 737 Max, but CEO Dave Calhoun has said the company is hesitant to ramp up output too quickly because of labor and supply chain strains.

It is currently producing around 31 of the jets a month and last week said it is aiming for a rate of 50 a month in the “2025/2026 timeframe.” The manufacturer plans to hire around 10,000 workers this year, it said in a filing on Friday.

It has a backlog of more than 3,600 of those single-aisle planes, with carriers including United Airlines, Delta Air Lines and Southwest Airlines awaiting planes. Boeing booked 700 orders for new 737 Max planes last year.

Boeing still plans to operate three production lines at the Renton, Washington, 737 Max factory, Deal said. He pointed to demand for newer models like the 737-10, the largest in the family, which still hasn’t won regulatory approval.

Boeing plans to hand over the last 747 it has produced to cargo carrier Atlas Air on Tuesday afternoon.

Leslie Josephs www.cnbc.com