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January 19, 2020 | 737 Max “Fix” Causes Entire Computer System to Crash

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Boeing is now testing its 737 Max fix in real planes. In doing so, Boeing has uncovered yet another problem.

Well, It Worked in the Simulator

Yet another problem came to light when testing a 737 Max fix designed to prevent fatal the crashes that have kept the plane grounded since March.

This problem surfaced when testing the fix in real planes instead of a simulator.

Please consider Boeing Finds New Software Problem That Could Complicate 737 MAX’s Return.

The latest glitch, which Boeing said Friday it was working to correct, prevents the jet’s flight-control computers from powering up and verifying they are ready for flight, according to industry and government officials.The length of the delay will largely depend on how long it takes Boeing engineers to address the problem and verify its elimination, though coordination with international regulators and other factors could complicate the process.

The software problem occurred as engineers were loading updated software—including an array of changes painstakingly developed over roughly a year—into the flight-control computers of a test aircraft, according to one person briefed on the details.

A software function intended to monitor the power-up process didn’t operate correctly, according to this person, resulting in the entire computer system crashing. Previously, proposed software fixes had been tested primarily in ground-based simulators, where no power-up problems arose, this person said.

Delays Stretch to 2022

Leeham News reports MAX Delivery Process Will be Slowed by FAA’s Fewer Resources.

Some Wall Street analysts believe Boeing can deliver 25 of the stored airplanes a month. Analysts typically gain some guidance from Boeing’s Investor Relations office before publishing a note. However, a person with direct knowledge of the plans says the FAA has only 10 inspectors, who will work Monday-Friday from 8am to 4pm. LNA has one report that the FAA now has arranged for 50 inspectors, but the person with direct knowledge can’t confirm this.

The planes each will have to go through detailed inspection after months of storage. Test flights by Boeing and the customer are routine. Squawks identified have to be resolved and, if necessary, an additional test flight performed. The entire process, called flow, normally takes about eight days, LNA is told. With the FAA assuming control on its own workday/weekday schedule and with only 10 inspectors, the flow could increase to 13-14 days per airplane.

It will take well into 2022 to clear the inventory,” LNA is told. “The process will really be slow. Boeing’s reputation with the FAA is damaged.”

Add Another Delay of Unknown Length

The above article pre-dates the latest glitch. Thus, the latest glitch is certain to cause more delays as well as increased lack of faith in the company.

Worst Yet to Come for Suppliers

Also consider Boeing Hasn’t Hit Bottom Yet. Neither Have Suppliers.

Production rates

When Boeing restarts production, it won’t be turning a key and resuming rate 42/mo, which was in place when production shut down this month. Based on available information, the initial production rate will be between 10-15 MAXes per month. The return to rate 42 likely won’t occur until 2021. Achieving rate 57/mo, which was the goal by the end of 2019, now likely won’t occur until late 2022 at the earliest.

Impact on suppliers

The impact on suppliers is going to be profound. Spirit Aerosystems last week announced it would lay off 2,800 employees for an indefinite period. It has no information from Boeing about the timing to restart production, nor at what rate.

The slow ramp-up means recalling employees, at Spirit, and any other supplier will be a gradual return to previous employment levels. It will be challenging for Small suppliers to stay in business.

Manufacturing Has Peaked This Economic Cycle

On Friday, I commented Manufacturing Has Peaked This Economic Cycle

Key Manufacturing Details

  • For the first time in history, manufacturing production is unlikely to take out the previous pre-recession peak.
  • Unlike the the 2015-2016 energy-based decline, the current manufacturing decline is broad-based and real.
  • Manufacturing production is 2.25% below the peak set in december 2007 with the latest Manufacturing ISM Down 5th Month to Lowest Since June 2009.

Recessionary Numbers

Supply Chain Disruption

A slowdown in autos coupled with a huge slowdown at Boeing seals the fate of manufacturing for this economic cycle.

Even if the economy avoids recession, the manufacturing recession is sure to escalate.

Mike “Mish” Shedlock

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January 19th, 2020

Posted In: Mish Talk

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