Mark Suchinski: Sheila, I would just add, I think you’re going here. If you think about — as Tom said, we’re in a forward loss. So, everybody understands that our costs are higher than the price and 787 consumes cash. So, when you think about 2022, for most of the year, for a big portion of the year, production was stopped. And so we were incurring costs at the end of the day, you couldn’t completely shut down the place, you still had to pay bills and some of the employees. So, our cost per unit at the lower production in 2022 was significantly higher. As we move into 2023, we are going to double production, which will help from a fixed cost standpoint and help reduce our cost per unit. And so when we think about cash flow, the consumption that we had in 2022 versus 2023, typically, as you build more units, that would put more pressure on your cash flow year-over-year.
But with the doubling of production, when we think about the cash consumption in 2022 on 787, how much cash we consumed at delivering 20 units versus how much cash we’re going to consume at 45 units, I would say there’s a little bit of pressure on cash flow in 2023 compared to 2022, but that’s how things shape up. We’re going to bring the cost per unit down. Production starts back up. We’re still losing money on it. Just a little less than what we lost in 2022. If that helps provide a little bit more clarity.
Sheila Kahyaoglu: Yes. Thank you.
Operator: Thank you, Sheila. Our next question comes from Ken Herbert from RBC. Ken, your line is now open.
Ken Herbert: Mark or Tom, I just wanted to see if you could clarify. It sounds like on a per unit basis on the 737, you talked in the past about breakeven at 31 a month, looks like that number is just creeping up with obviously the incremental cost around staffing and supply chain disruptions. Can you level set us now on how we should think about that for the 737, maybe sort of where we are today and where you expect it to be at the end of the year?
Tom Gentile: Great. Well, can I think — it is true that we are seeing higher levels of cost on the 737 program right now, in particular, because we’ve overstaffed it to get ready for higher rate breaks. And we’ve also seen some increases in cost in things like utilities and logistics and even some labor costs as well as supply chain. So, we said that in the past that once we got to 31 aircraft per month, that would be breakeven. This year, we’re going to — basically, we started the year off at 31%, and we’re going to continue. We have a couple of rate breaks later in the year, and we’re saying that we’re going to be breakeven. So, we do have some additional units in this year, but we’ll see how everything flows out in terms of how much better we can do.
But I would say that — we said that 31 aircraft per month, we get back to breakeven. This year, we’re going to be consistently at 31 aircraft per month plus some at the back end of the year, and we will be breakeven. All that said, as I said, there are some higher costs, no doubt about it in the system, which is putting pressure and we’re working to offset those. What will help, though, is as we continue to go up in rate, we’ll absorb more of the fixed cost, and we will naturally improve the margin as the rate goes up.
