OM in the News: What are Boeing’s “Shadow Factories”?

Boeing is promising this year to get its jet production to precrisis levels and chip away at a growing backlog of orders. First, the manufacturer needs to clear out the dozens of planes in its shadow factories, reports The Wall Street Journal (Feb. 15-16, 2025). A shadow factory is what Boeing executives call a production line where engineers and mechanics work on fixing, maintaining or updating aircraft instead of building new ones. They exist for the company’s two-bestselling models, the 737 MAX and 787 Dreamliner.

As Boeing is struggling to hire and train enough machinists, the shadow factories can occupy some of the company’s most experienced workers. In some cases, Boeing spends more hours inspecting and reworking planes than it did to produce them in the first place. “It seems like 30% of everybody’s job is fixing something that’s bad quality or late product or something that shouldn’t have happened,” said the CEO.

It isn’t the first time Boeing has pledged to solve its shadow-factory problem. The company had initially vowed to be rid of it by the end of 2024, but clearing out the planes has proven vexing. The biggest chunk are MAXs parked at a facility in Moses Lake, Wash. They are mainly remnants of a global grounding of MAX jets following a pair of fatal crashes in 2018 and 2019. Boeing continued making the planes even though airlines weren’t taking them, and is still working to deliver them. Another couple of dozen are 787s sitting in Everett, Wash., awaiting checks to ensure parts of the planes are properly pieced together following quality questions raised years ago around the jet’s production process.

A year ago, Boeing estimated it had about 225 jets in the shadow factories.  Not only do the planes take up space and tie up billions in much-needed revenue, they require sophisticated care and reworking, which means some of the company’s most skilled machinists are charged with fixing defective jets.

Any time a model requires an update or repair—a common occurrence in machinery as complicated as a jetliner—crews must do the relevant work on every unfinished plane. In 2023, for instance, the company had to repair around 160 737s in the shadow factory after misdrilled holes were found in the fuselage of a completed jet.

Classroom discussion questions:

  1. Why is a shadow factory an unwise operations tool?
  2. What has happened at Boeing in recent years to cause such quality problems?