Boeing CFO Raises Concerns Over Tariffs' Impact on Parts Availability

Washington, D.C. - Boeing's Chief Financial Officer, Brian West, has expressed concerns over the potential impact of new tariffs on the availability of aircraft parts, highlighting the challenges they could pose for the aerospace giant’s supply chain. Speaking at a Bank of America industrials conference, West reassured that Boeing currently has sufficient inventory but acknowledged uncertainties regarding long-term supply stability.

Tariffs and Supply Chain Disruptions

The latest round of tariffs, imposed by the U.S. government, includes a 25% levy on Canadian and Mexican goods and a 20% increase on imports from China. These measures have raised concerns among manufacturers, especially those relying on a global supply network. Boeing, which sources parts from various international suppliers, now faces potential cost escalations and supply disruptions.

West stated that while Boeing is monitoring the situation closely, the company is preparing for possible delays in sourcing key components. “We are watching this carefully and ensuring our supply chain remains resilient,” he said.

Financial Outlook and Production Plans

Despite supply chain worries, Boeing remains optimistic about its financial performance. West projected that the company could see an improvement of "hundreds of millions" of dollars in cash flow during the first quarter of 2025. This positive outlook is supported by a strong backlog of over 5,000 aircraft orders, primarily for the 737 MAX model.

To meet growing demand, Boeing is ramping up production of its key aircraft models. The company plans to increase the monthly output of the 737 MAX from the mid-20s to 38 planes, while the 787 Dreamliner production is set to rise from five to seven jets per month.

Challenges in the Defense Sector

Boeing’s defense sector has also faced setbacks, particularly with the KC-46 tanker program. Recently, deliveries of the KC-46 were halted after cracks were found in the wings of two aircraft awaiting delivery. However, West assured that Boeing is addressing the issue and does not anticipate any major financial impact or production delays.

Additionally, Boeing is evaluating the consequences of a fire at the SPS Technologies plant, which manufactures 10% to 15% of the fasteners used in the aerospace industry. While the company does not foresee major disruptions this year, it is closely monitoring the situation for any long-term supply constraints.

Market Performance and Competitive Landscape

Boeing's stock has struggled in recent weeks, experiencing an 11.7% decline in March. In contrast, its European competitor Airbus has seen a surge, with shares reaching record highs amid strong demand. Analysts suggest that tariffs, combined with Boeing's recent quality and supply chain issues, have contributed to its stock’s underperformance.

Despite these challenges, Boeing remains focused on stabilizing production, addressing supply chain concerns, and fulfilling its extensive order backlog. As the aviation industry navigates economic uncertainties and trade policies, the company’s ability to adapt to these disruptions will be critical in maintaining its market position.