Boeing's Push to Boost 737 Production Starts With Closing 'Shadow Factory'

Manufacturer vows to finally shut lines that fix planes instead of building new ones

- Sharon Terlep

Issane Mounir stood before the skeptical and anxious crowd filled with hundreds of manufacturers whose fortunes rise and fall with Boeing.

The Boeing executive ticked off a list of accomplishments—fewer defects and more frequent supplier updates—since he had addressed the group last February, weeks after a door-plug blew off an Alaska Airlines jet. Despite the progress, the supply chain guru confessed a fundamental problem.

"We're selling more than we can build," he said.

Boeing is promising this year to get its jet production to precrisis levels and chip away at a growing backlog of orders. First, the manufacturer needs to clear out the dozens of planes in its shadow factories.

A shadow factory is what Boeing executives call a production line where engineers and mechanics work on fixing, maintaining, or updating aircraft instead of building new ones. They exist for the company's two best-selling models, the 737 MAX and 787 Dreamliner.

As Boeing is struggling to hire and train enough machinists, the shadow factories can occupy some of the company's most experienced workers. In some cases, Boeing spends more hours inspecting and reworking planes than it did to produce them in the first place.

"It seems like 30% of everybody's job is fixing something that's bad quality or late product or something that shouldn't have happened," CEO Kelly Ortberg told employees last year at his first town hall meeting.