By Valerie Insinna and David Shepardson
SEATTLE/WASHINGTON (Reuters) -Boeing Co told employees on Monday that it will add a new 737 MAX production line in Everett, Washington, in mid-2024 as it plans to ramp up deliveries of its best-selling plane.
Boeing (NYSE:BA) Commercial Airplanes Chief Executive Stan Deal said in an email reviewed by Reuters that the new line will be its fourth for the narrow-body 737 MAX and is needed because of "strong product demand."
The company is reactivating its third 737 MAX line in Renton, Washington, Deal added.
Boeing booked nearly 700 MAX orders last year, delivered 387 737s and has a total backlog of about 3,600 MAX airplanes.
"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," Deal said.
The move comes as demand for wide-body jets that were previously built in Everett has been under pressure, despite a partial recovery. It was disclosed on the eve of the final delivery of the iconic 747 from the plant.
The 737 line will take the place of some remaining activity on the 787, a modern wide-body jet whose production has been concentrated at another Boeing plant in South Carolina.
Boeing said this month it had stabilized 737 production at 31 per month, with plans to ramp production up to approximately 50 per month in the 2025-2026 timeframe.
UNION SUPPORT
Deal referred to a decision of Congress in December to lift a deadline imposing a new safety standard for modern cockpit alerts for two new versions of the 737 MAX aircraft.
The planemaker had been heavily lobbying for months to persuade lawmakers to waive the deadline covering the MAX 7 and MAX 10 airplanes, imposed by Congress in 2020 after two 737 MAX crashes killed 346 people in Indonesia and Ethiopia.
Boeing had said the fate of the two new planes was in jeopardy without action from Congress.
Deal's email cited the support of unions for the waiver, including the International Association of Machinists (IAM).
Earlier this month, IAM International President Robert Martinez said the union "relentlessly fought for this extension that will ensure the livelihoods of thousands of machinists in the aerospace sector."
The legislation requires Boeing to fit new safety enhancements to the MAX 7 and MAX 10 and retrofit existing MAX 8 and MAX 9 planes in the fleet. Boeing said the costs of the retrofits will be "small."
Boeing Chief Executive Dave Calhoun said this month the company thinks "first delivery for the 7 will be this year and probably for the 10 the next year."
Airline executives including United Chief Executive Scott Kirby (NYSE:KEX) and employee unions had raised concerns that a failure of Congress to act would have impacted U.S. jobs at Boeing.
Officials have credited airline unions with helping convince Congress to approve the waiver over the objection of some relatives of those killed in the 737 MAX crashes.