Production of Boeing (BA.US) 777 freighters reportedly halted for nearly two months due to a supply dispute with a vendor affecting key components

According to Golden Ten Data APP, Boeing (BA.US) employees and court documents reveal that Boeing has had a dispute with a small Florida-based supplier, causing production of the Boeing 777 freighter to be halted for nearly two months and disrupting production of the 767 model, including both freighters and the KC-46 aerial refueling aircraft.

According to a copy of the lawsuit, Boeing filed suit in August, accusing the supplier Vaero of halting deliveries of a key wing component, the trailing-edge rib kit, resulting in a production stoppage at the wing factory in Everett, Washington. This factory supports both the 777 freighter and 767 projects. The lawsuit states that the production stoppage cost Boeing up to $6.5 million per day. Boeing indicated in the lawsuit that the trailing-edge rib kit is an “indispensable” component, and Vaero is the only supplier of this part.

According to three Boeing employees familiar with the matter, although the two companies reached a settlement at the end of September, production of the 777 freighter has still not resumed. Sources said the dispute has also disrupted production of the 767, a wide-body cargo and military aircraft. One employee noted that since the settlement, Boeing has received some parts for the 767 production line.

The lengthy production interruption highlights the fragility of the aerospace supply chain and illustrates that a dispute involving a single supplier can bring aircraft production to a standstill, even as demand for these planes remains strong.

In addition, according to two sources, Boeing is attempting to move production of the trailing-edge rib kit in-house. This component is used in the assembly of the wings for both the 767 and the current 777 freighter. The Boeing 777X, which uses composite wings, has not been affected.

One Boeing employee stated that, due to the lack of Vaero-supplied components, Boeing has removed two partly assembled 777 freighters from the final assembly line.

Boeing's data shows that, so far this year, the company has delivered 21 777 freighters. According to two employees, a small number of freighter wings were assembled before the dispute, so these may still be delivered before the end of the year.