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By Eric M. Johnson
SEATTLE, Aug 22 (Reuters) - Boeing Co has toldsuppliers it will resume production of its best-selling 737 jetsat a rate of 52 aircraft per month in February 2020, thenstepping up to a record 57 jets monthly in June, three peoplefamiliar with the matter told Reuters.
Boeing told more than 100 suppliers during at least one Webmeeting July 30 that the new schedule depended upon regulatorsapproving the 737 MAX to fly again commercially in the fourthquarter, one of the people said.
Shares of Boeing, the largest U.S. exporter with about145,000 employees, were up 4.5 percent at $355.18.
Boeing mainly builds the latest version of its cash-cowsingle-aisle family at its Seattle-area factory, but also buildsa small number of earlier or military variants of the 737.
One of the people expressed skepticism over the timing giventhe intense scrutiny from regulators that grounded the 737 MAXafter deadly crashes killed nearly 350 people in Ethiopia andIndonesia in the span of five months.
There is no guarantee when regulators will clear the 737 MAXto fly again, and Boeing Chief Executive Dennis Muilenburg toldanalysts last month that Boeing would consider further 737output cuts or potentially suspending production if thegrounding dragged on.
In April, Boeing cut the number of 737s it produces monthlyto 42 from 52 after halting deliveries to airline customers,cutting off a key source of cash and hitting margins.
Because the grounding happened when Boeing was going uptowards record production levels, and each move of the sprawlingsupply chain has to be planned far in advance, Boeing and itssuppliers are now caught between two conflicting pressures:preparing to get back on the upward path as soon as the plane isflying but also ratcheting downwards if regulators stall and thegrounding continues for longer than expected.
Boeing has been tight-lipped about its production plans.
Muilenburg told analysts last month that Boeing expects tobe able to maintain its current monthly production rate of 42aircraft, "followed by incremental rate increases that wouldbring our production rate to 57 during 2020."
Two persons familiar with Boeing's production plans, whospoke to Reuters on condition of anonymity, said Boeing toldsuppliers it will increase production from 42 to 47 single-aisleaircraft per month in October, jibing with its guidance toinvestors on when it expects to win regulatory approval. Itwould then increase from 47 aircraft to the pre-crash rate of 52aircraft per month in February 2020, the people, and a thirdperson familiar with the plans, said.
Boeing then would hit a record stride of 57 single-aislejets per month in June 2020, two of the people said.
In response to questions from Reuters, Boeing spokesman PaulBergman said Boeing updated the 737 master production scheduleto reflect timing assumptions for the 737 MAX return to serviceplan.
"While the assumption reflects Boeing's best estimate atthis time, the actual timing of return to service will bedetermined by the FAA and other global aviation regulatoryauthorities and could differ from this assumption and estimate."
The current production plan represents a new delay as Boeingwrestles with the logistics of aligning a sprawling globalsupply chain with its high-volume assembly line in Renton,Washington.
Rate changes by major manufacturers are usually incrementaland communicated months or even years in advance, but theunprecedented challenge to the 737 program has forced Boeing toscramble, one of the people said. Boeing is eager to increaseproduction because the higher rate means it can deliver moreplanes and get more cash. A higher rate also means Boeing paysless for parts.
Boeing organized at least one Web meeting on July 30 toinform suppliers that the original rate ramp plan - which Boeingdecided in April would begin in August - was being delayed bythree months, according to electronic materials described toReuters by a person who attended. Different suppliers wereshipping at different "rate profiles" and Boeing wanted to tryto "harmonize the supply chain," the person added.
(Reporting by Eric M. Johnson in Seattle, additional reportingby Tracy Rucinski in ChicagoEditing by Nick Zieminski)