And that will get back at a positive territory. And then the good news is by 2025, 2026, we still have a view where they will be double-digit margins as they have been historically. And that will be underwritten by this. These dual factories that Dave’s talked about will be behind us. And all that labor that today is working on inventory airplanes for both the 37 and the 87 is going to go be applied to these ramps in the rates up to 50 and 10 respectively in the 37 and the 87. So all of that still is right in front of us and it all still give us confidence that we’re going to be able to hit those kind of targets. And the BCA team is very focused on delivering that.
Sheila Kahyaoglu: Okay, great. Thank you.
Operator: Thank you. Our next question is from Cai von Rumohr from TD Cowen. Please go ahead.
Cai von Rumohr: Yes, thanks a lot. So Brian, 777X R&D spiked up. It looks like total R&D at BCA was up about $150 million sequentially. Where do those – where does the 777X sort of R&D number go moving forward? When does it peak? When does it come down? And also maybe you could update us on the certification status given we’re in a CR, [ph] are we going to make it on MAX 7 by year end? What about MAX 10? What about achieving TIA on the 777X?
Brian West: Yes. So let’s start with the R&D question. So overall R&D, we continue to spend on the dash seven and the dash 10 and the uptick is as I pointed out and as you mentioned on the 777X and the 777-8 Freighter. Now as we move forward, that range of three – call it three, four-ish billion of R&D, that’s going to modestly go up over the next couple years. But it’s not going to do anything to disrupt our free cash flow target. And if it goes up a little bit, I think that’ll be good news because we’re investing in programs. So we’re not necessarily worried about that at all. And it’s all within our expectations, both near term and longer term. And in terms of the certification milestones that we have in front of us, as Dave mentioned, there’s been no change to either the dash seven, the dash 10 or the 777X we move forward and particularly the 777X team’s hard at work at trying to meet that commitment.
So there’s really nothing to say other than there’s a lot of people hard at work, which is why we continue to invest in those spots.
Dave Calhoun: I always have to add because I don’t want to get in a trap like we did a long time ago. The FAA makes that call and we’re going to give them all the flexibility they need. We try to interpret it the best we can, and that’s what we’ve done. Know that there haven’t been any real changes to the airplanes. So we are mostly working design assurance documentation as required by the new legislation back at the end of 2020.
Cai von Rumohr: And on the issue of 777X, TIA, when do you expect that?
Brian West: I don’t think that we’ve necessarily put a date out on that for obvious reasons. So we’ll let the teams do the work and we’ll let the regulators dictate those specifics and we’re just going to follow their lead.
Cai von Rumohr: Thank you very much.
Operator: Thank you. And the next question is from Seth Seifman from JPMorgan. Please go ahead.
Seth Seifman: Hey. Thanks very much. Good morning everyone. Brian, with your comment that the 2023 cash flow is going to come in at the low end of the range, your expectation for growth in 2024. I guess, should we be expecting 2024 to be in the 2023 range when we’re trying to get a draw beat on where 2024 is? And then within that, the 737s, sometimes I think it’s hard to bridge between production and deliveries. If it’s 38 a month exiting the year, can we say at least 38 times 12 next year plus some chunk of the inventory that’s remaining?
Brian West: Yes. So Seth, we’re just going to wait until January to be able to describe any kind of range for cash flow next year. We just got to get through our planning cycle. We had to close the year. So just be patient with us. But we will be specific in January, the same way we were this year. And I’ll also probably let you know that, that would apply to your question on deliveries or how to think about them. Delivery is going to be higher next year. We’re going to have momentum going on this year. All of those details, we’re going to flesh out and share at the beginning of the year and at the right time, and we look forward to doing that.
Seth Seifman: Okay. Thanks very much.
Operator: The next question is from Noah Poponak from Goldman Sachs. Please go ahead.
Noah Poponak: Hey. Good morning everyone.
Dave Calhoun: Hi Noah.
Brian West: Hi Noah
Noah Poponak: Brian, just staying on the 737 pace for me, recognizing you’re not going to give a number for next year, it sounds like. But if October is similar to September, it implies November, December are decent delivery numbers. So is it the case that the aft fuselage issue and the incremental inspection of hand-drilled in addition to laser-drilled fasteners, that, that is kind of behind you as you get to January 1st? It’s not impacting 2024, 737 deliveries. And then when you’re talking about being at 38 a month out in the off-the-line final assembly versus where the system is, is a different number, is there a wide gap in that to start the year? Or can we think out a real clean stable 38 a month to start the year?
Brian West: Answer your first question, the answer is yes, for sure. And in terms of how we think about the rate, we, the system, as Dave mentioned has always maintained to be hot because we want to make sure that they know that the demand signal is there. And we want them to continue focus on that master schedule. How exactly as we start the year we’ll be able to count deliveries relative to that 38, we’ll see. But right now, job one is to exit – get the non-conformance behind us. Remember, we had about a 30 aircraft growth between the second quarter and the third quarter into the inventory airplane. So that’s going to be working its way out of the system relatively quickly, which gives us confidence in the November, December time frame.
And then as we think about prime of the pump for 38 per month, we’re going to move towards January and beyond and hopefully some pretty good execution. So we’ll have to wait and see exactly how that plays out, but the underlying system is going to stay at 38. And as we get through next year, obviously, there’ll be certain rate ramps that we’ll describe later. But right now, if we have everything be coordinated across the broad supply chain, I think we’ll be fine.
