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Boeing Corp. will suspend production of its troubled 737 Max jetliner in January, but does not plan to lay off or furlough the workers who build the plane, the company said in a statement Monday.
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 in to the Java Sea in October 2018 and an Ethiopian Airlines plan crashed near Addis Ababa in March. The company has said the crashes were caused by software failures.
Since then, the company said it has continued to build about 400 new 737 Max airplanes that currently are in storage.
"We have decided to prioritize the delivery of stored aircraft and temporarily suspend production on the 737 program beginning next month," the company 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 Federal Aviation Administration to certify its software fixes. As NPR's David Schaper reports, 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 is temporarily halting production of its grounded 737 Max after the Federal Aviation Administration (FAA) said last week it would not approve the plane’s return to service before 2020.
The decision came after the US planemaker’s board held a regular two-day meeting in Chicago, which started on Sunday.
“Safely returning the 737 Max to service is our top priority,” Boeing said in a statement. “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 Max, which was Boeing’s bestselling plane, has been involved in two fatal crashes that claimed 346 lives. More than 700 Max jets are now grounded worldwide. It is the first time in 20 years that Boeing has halted 737 production and the move could have significant repercussions for the US economy.
Boeing is the US’s largest manufacturing exporter and a shutdown would impact suppliers across the country, hitting the country’s already troubled manufacturing sector. The suspension has already led to the cancellation of thousands of flights scheduled by airlines that were awaiting new planes or had bought ones that are now grounded.
The Seattle Times reported on Sunday that the board was considering a proposal from top management to temporarily shut down 737 production in Renton, Washington from January.
Boeing as yet has no timeframe for restarting production but plans to redeploy its 12,000-strong Renton workforce.
Boeing has said if it did not receive approval to begin deliveries before the end of the year it could be forced to further slow production or temporarily shut down the Max production line, a move that would have repercussions across its global supply chain.
On Thursday, Boeing abandoned its goal of winning approval this month to unground the 737 Max after its chief executive, Dennis Muilenburg, met FAA administrator Steve Dickson. Dickson said on Wednesday he would not clear the plane to fly before 2020 and disclosed the agency had an ongoing investigation into 737 production issues in Renton, Washington.
Dickson said there were nearly a dozen milestones that must be completed before the Max returns to service. Approval is not likely until at least February and could be delayed until March, US officials told Reuters last week.
Dickson told Muilenburg, according to an email sent to lawmakers by the FAA, that “Boeing’s focus should be on the quality and timeliness of data submittals for FAA review. He made clear that FAA’s certification requirements must be 100% complete before return to service.”
Boeing had said last month it expected the FAA would allow it to resume 737 Max deliveries in December.
The FAA told congressional staff in an email last week Dickson was “concerned that Boeing continues to pursue a return-to-service schedule that is not realistic ... More concerning, the administrator wants to directly address the perception that some of Boeing’s public statements have been designed to force FAA into taking quicker action.”