Boeing suspends production of 737 MAX
American plane maker Boeing said it was suspending production of the troubled 737 MAX, a move likely to hit the broader US economy as well as thousands of suppliers. Boeing said it does not expect “at this time” to lay off or furlough any employees, but that could change of course depending upon how long the MAX remains grounded.
Boeing has been in the harsh glare of the PR spotlight in the past year following two crashes of MAX models that killed almost 350 people. The plane’s MCAS software system, which was originally meant to prevent the plane from stalling, has been identified as contributing to the crashes in Africa and Indonesia and Boeing has come under withering criticism for allowing the system to be activated by a single sensor. At congressional hearings in the US in October, the 737 MAX planes were described as “flying coffins” and American politicians called on Boeing CEO Dennis Muilenburg to resign.
Boeing, in its statement announcing the suspension, said “safely returning the 737 MAX to service is our top priority. We know that the process of approving the 737 MAX’s return to service, and of determining appropriate training requirements, must be extraordinarily thorough and robust, to ensure that our regulators, customers, and the flying public have confidence in the 737 MAX updates”.
The company was recently rebuked by the US Federal Aviation Administration (FAA) for painting too-rosy of an outlook for the plane’s return to service. Boeing was told by the FAA to quit hinting about the timeline involved in gaining approval from regulators.
A chastened Boeing said in its statement that “as we have previously said, the FAA and global regulatory authorities determine the timeline for certification and return to service. We remain fully committed to supporting this process. It is our duty to ensure that every requirement is fulfilled, and every question from our regulators answered”.
Boeing said in addition to the 737 MAX jets already delivered to airlines that had been flying and are now grounded, there are about 400 airplanes in storage. The decision to suspend production is the “least disruptive to maintaining long-term production system and supply chain health”, Boeing said, adding that affected employees will continue 737-related work or be reassigned to other teams. The company said it would provide an update when it releases its 2019 fourth-quarter earnings in January.
