Boeing needs more cash; puts the squeeze on its suppliers

September 1, 2016  |  Credit Management, Payment, Purchase-to-pay

Boeing is stepping up efforts to conserve cash and to cut costs in its supply chain. The way to do it? Telling its vendors it will take longer to pay bills. Boeing claims these measures are were necessary to compete when airlines want more capable planes at lower prices.

Under the new terms, Boeing is taking up to 120 days to pay, rather than 30 days as in the past.. The new payment schedules are being rolled out this year.

Under a program called Partnering for Success, launched in 2012, Boeing suppliers cut prices 15 percent. Now, executives at Boeing suppliers say Muilenburg is pushing a renewed round of cost cutting.

Boeing spokeswoman Jessica Kowal:

“To align with industry norms and remain competitive, we are in the process of adjusting the payment terms of our large suppliers. In most, if not all cases, our new payment terms are in line with their payment schedules to their own suppliers.”


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