JAKARTA (TheInsiderStories) – Boeing Corp. will suspend production of its troubled 737 Max jetliner in January, but it does not plan to lay off or furlough the workers who build the plane, the company said in a statement Monday (12/16). The move was a drastic step after the Federal Aviation Administration (FAA) said its review of the planes would continue into next year.
The Boeing 737 Max jetliners have been grounded worldwide since March in the aftermath of two fatal crashes that killed a total of 346 people. A Lion Air jet crashed into Indonesia’s Java Sea in October 2018 and an Ethiopian Airlines plane crashed near Addis Ababa in March. The company has said the crashes were caused by software failures.
Since then, the company has continued to build about 400 new 737 Max airplanes that currently are in storage, it said.
“We have decided to prioritize the delivery of stored aircraft and temporarily suspend production on the 737 programs beginning next month,” Boeing said. “We believe this decision is least disruptive to maintaining long-term production system and supply chain health.”
As for the production workers, “it is our plan that affected employees will continue 737-related work, or be temporarily assigned to other teams in Puget Sound,” the company said.
Boeing is waiting for FAA to certify its software fixes. It said FAA certification is not expected until February 2020 at the earliest. Boeing referred to the certification in its statement.
“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.”
Boeing last week acknowledged that regulators’ review of the planes grounded since March would last until the following year, longer than the end-of-year approval the Chicago-based manufacturer was targeting.
Just how long Boeing will keep its 737 Max production line halted was not immediately clear, because it will depend on when regulators clear the plane to fly again. United States airlines have taken the planes out of their schedules until at least March. American last week said it doesn’t expect to fly the planes before April.
Boeing had repeatedly warned investors that it could further cut or suspend production of the planes altogether if the flight ban lasts longer than expected, as it has. Boeing slashed production by 20 percent in April to 42 a month after regulators ordered airlines to stop flying the planes.
Close to 400 Max planes were in global fleets when regulators grounded the planes in mid-March after two fatal crashes in a span of five months. Since then, Boeing has produced some 400 more of the jetliners, which are parked at its facilities in Washington state and elsewhere.
The grounding, now in its 10th month, has prevented Boeing from delivering planes to customers, and the company said halting production would help it deliver the stored planes when the grounding is lifted.
Written by Lexy Nantu, Email: email@example.com