US aerospace giant Boeing today announced that it has decided to halt the production of its ill-fated 737 MAX passenger aircraft.
There are over 400 Boeing 737 MAX jets that have already been produced, but with a federal safety review still ongoing, the company cannot deliver them until the ban is lifted.
Boeing has issued the following statement today:
“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. 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.
Throughout the grounding of the 737 MAX, Boeing has continued to build new airplanes and there are now approximately 400 airplanes in storage. We have previously stated that we would continually evaluate our production plans should the MAX grounding continue longer than we expected. As a result of this ongoing evaluation, we have decided to prioritize the delivery of stored aircraft and temporarily suspend production on the 737 program beginning next month.
We believe this decision is least disruptive to maintaining long-term production system and supply chain health. This decision is driven by a number of factors, including the extension of certification into 2020, the uncertainty about the timing and conditions of return to service and global training approvals, and the importance of ensuring that we can prioritize the delivery of stored aircraft. We will continue to assess our progress towards return to service milestones and make determinations about resuming production and deliveries accordingly.
During this time, it is our plan that affected employees will continue 737-related work, or be temporarily assigned to other teams in Puget Sound. As we have throughout the 737 MAX grounding, we will keep our customers, employees, and supply chain top of mind as we continue to assess appropriate actions. This will include efforts to sustain the gains in production system and supply chain quality and health made over the last many months.
We will provide financial information regarding the production suspension in connection with our 4Q19 earnings release in late January.”
Production at the Renton, Washington facility near Seattle will be suspended in January and it is unclear how long the pause will last.
The 12,000 workers affected will not be fired or furloughed, according to the news sources.
The Federal Aviation Administration ordered the grounding of all 737 MAX models in March, grudgingly following the lead of countries around the world after the fatal crash of Ethiopian Airlines Flight 302 killed 157 people. Five months earlier, a 737 MAX of Indonesia’s Lion Air crashed in the same manner, killing 189 passengers and crew.
Since then, almost 400 MAX jets have been stuck on the ground, and Boeing has manufactured 400 more, which it cannot deliver to customers anywhere. The FAA review is still ongoing, amid a number of revelations suggesting that flaws with the MAX’s control software were long known to the company and its test pilots.
The FAA administrator Steve Dixon met with Boeing CEO Dennis Muilenburg last week and told him to stop issuing public statements about the MAX’s imminent return to service.
An email from the FAA to Congress about the meeting said that the company’s schedule was “not realistic” and that Dixon wanted to “directly address the perception that some of Boeing’s public statements have been designed to force FAA into taking quicker action.”
