Lines Will Go Idle In January As Recertification Is Pushed Into 2020

Citing ongoing issues with recertification of its beleaguered 737 MAX, Boeing has announced it will suspend production of the airliners beginning in January.

"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," the planemaker said in a statement released to the media.

Throughout the grounding of the 737 MAX, Boeing has continued to build new airplanes and there are now approximately 400 airplanes in storage. The company has previously stated that it would continually evaluate our production plans should the MAX grounding continue longer than expected. As a result of this ongoing evaluation, Boeing has made the decision 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," the statement said.

The company said it hopes to not have to lay off workers in the Puget Sound region as a result of the manufacturing pause. The company said it plans to have affected employees continue 737-related work, or temporarily reassigned them 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," Boeing said.

The company will provide financial information regarding the production suspension in connection with its fourth quarter (4Q19) earnings release in late January.

(Source: Boeing news release. Image from file)

FMI: www.boeing.com