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Boeing Expands Canadian 737 Plant

By Rich Smith - Apr 23, 2013 at 10:57PM

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Faster plane production means more room needed to build planes.

Last month, Boeing (BA 6.45%) confirmed that strong demand for its airliners has convinced the company of the need to accelerate plane production. Boeing's building 777 and 787 aircraft faster than ever, while 737s will soon be churning out of Boeing factories at the rate of 38 planes per month, en route to a 42-per-month production rate early next year.

Of course, such breakneck production rates require increasing elbow room for Boeing workers, and so it was that on Tuesday, the company announced that it's expanding the size of its Murray Park Road manufacturing site in Winnipeg by more than 22% -- from 515,000 square feet to 665,000 square feet of manufacturing space.

The new production space is needed to accommodate work on the single-piece composite-material acoustic inner "barrel" on the redesigned 737 MAX's engine nacelle inlet. One key to the 737 MAX's sales success is the plane's quiet running, and key to that is the acoustic barrel, which helps to reduce operational noise on the aircraft by up to 40%.

Boeing didn't disclose the cost of the manufacturing plant's expansion, nor its effect on future profitability. This didn't faze investors, however, who bid up Boeing shares by 1.4% Tuesday, to a closing price of $88.18, within spitting distance of the stock's 52-week high.

Editor's note: A previous version of this article referred to the production rates as per day, rather than per month. The Fool regrets the error.

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