Boeing will suspend 737 MAX production in January, no layoffs or furlough

By 17-12-2019 December 19th, 2019 No Comments

The announcement – a result of the prolonged 737 MAX grounding since March 13th – was made on Monday. Workers will be re-deployed to other facilities; Boeing will not specify a timeline for a restart, leaving that to the FAA.

When the 737 MAX was grounded, on March 13th, Boeing had been producing 52 737s monthly, but it cut the rate to 42 aircraft monthly in April. Now, Boeing has around 400 737 MAXs in storage.

Below, Boeing’s press release issued on Monday, December 16th:

“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’ll provide financial information regarding the production suspension in connection with our 4Q19 earnings release in late January.”

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