Boeing’s 737 crisis deepens as production stops for first time in two decades

UNITED STATES – Leading aerospace manufacturer, Boeing Co has said it would suspend production of its best-selling 737 MAX jetliner in January 2020.

The move to stop production, is the company’s biggest assembly-line halt in more than 20 years, as fallout from two fatal crashes of the now-grounded aircraft drags into 2020.


A spokesman said that the aerospace giant would however continue production of a military derivative of the 737, the P-8 maritime surveillance jet.

Boeing, which builds the 737 aircraft series in south of Seattle, said it would not lay off any of the roughly 12,000 employees there during the production freeze, though the move could have repercussions across its global supply chain and the U.S. economy.

The 737 MAX has been grounded since March after two crashes in Indonesia and Ethiopia killed 346 people within five months, costing the plane manufacturer more than US$9 billion so far.

Reuters reports that the decision to halt production will have little immediate impact on airlines that have already seen deliveries halted, forcing many to cancel flights or lease older replacements.

It however, marks a deepening of a crisis that has already seen Boeing’s fastest-selling jet grounded worldwide, its safety record scrutinized, customers pressing for compensation and its cornerstone relationship with the FAA placed under strain.

The move also threatens to hit U.S. economy, with House representative Rick Larsen calling Boeing’s decision “a body blow to its workers and the region’s economy.”

Analysts highlighted General Electric Co, Safran and Senior Plc as other suppliers that could experience disruptions.

GE and Safran co-produce engines for the 737 MAX and unlike most suppliers are paid mostly once the airplanes are delivered to the airline buyer.

Until now Boeing has continued to produce 737 MAX jets at a rate of 42 per month and purchase parts from suppliers at a rate of up to 52 units per month, even though deliveries are frozen until regulators approve the aircraft to fly commercially again.

Boeing did not say how long the shutdown might last, stressing this was up to the FAA. Previous efforts to predict when the 737 MAX might return to service after software training changes had drawn a sharp response from the U.S. regulator.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.