General Electric Co.’s (NYSE: GE) Aviation division and its 50-50 partner Snecma, part of France’s Safran, will build the plane’s engines. Today, Boeing said Honeywell International Inc. (NYSE: HON) and Rockwell Collins Inc. (NYSE: COL) will supply subsystems for the planes, although new subsystems will be kept to a “limited” number.
The other announcement from the aircraft maker today is that it will begin building 42 new 737s in the second quarter of 2014 and the 737 MAX will begin production in 2015 on a new line to be set up at Boeing’s Renton, Washington, facility. That third production line will eventually be used to boost 737 production again.
There’s really no big news here, except that Boeing has apparently met its first self-imposed deadline for the 737 MAX. Given the company’s history of delays and flubs getting the 787 into production, this could be the beginning of a counter-trend. We’ll see.
Right now, Boeing’s stock has the delivery date for the new 737 MAXes priced in, and the production increase is still more than a year away. The two bits of information essentially cancel one another out as far as the stock price is concerned. Of more importance, is what will happen to the U.S. defense budget at the end of the year, and what impact that will have on Boeing. The defense division’s sales were down 4% in the third quarter, as sales of military planes decreased.
Shares of Boeing’s stock are down about 0.1% today at $71.20 in a 52-week range of $62.12 to $77.83.
Paul Ausick
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