The Boeing 737 MAX has been grounded globally since March 2019. Despite that, production of the plane has continued for all these months. At this point there are approximately 400 Boeing 737 MAX planes in storage — there are so many that they’ve even resorted to using employee parking lots to park some of them.
Given this ongoing issues, Boeing has today made an inevitable announcement.
Boeing Will Halt 737 MAX Production
Boeing has been saying all along that they’ll continue to evaluate production plans if the 737 MAX grounding continues, so they’ve now made a pretty significant decision. Boeing has decided to suspend 737 MAX product starting in January 2020, given their backlog of about 400 737 MAX aircraft.
The company says that they’re instead going to “prioritize the delivery of stored aircraft,” though that doesn’t exactly mean a whole lot right now, since they’re not delivering any of them.
Boeing believes the decision is the least disruptive to maintaining long-term product system and supply chain health. The company says the 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
- The importance of ensuring they prioritize the delivery of stored aircraft
Boeing says that they’ll continue to assess their progress towards return to service milestones and based on that will decide when to resume production.
Boeing says that they won’t be laying off any employees, but rather that employees will continue 737 related work, or will temporarily be assigned to other teams at Boeing.
For now the company isn’t sharing any details about the financial impacts of this, but rather they will do so during the 4Q19 earnings release in late January.
The 737 MAX Certification Remains In Limbo
We’ve seen Boeing executives repeatedly push a timeline for when they’d like to see the 737 MAX return to service, and that has slipped several times. Until recently they hoped the plane would again be certified before the end of 2019, while the most recent timeline had the plane once again certified by February 2020 at the earliest.
The reality is that Boeing shouldn’t be giving estimates of when the plane will be returned to service, since this is something that should be completely out of their hands.
Just recently FAA Administrator Stephen Dickson had a meeting with Boeing CEO Dennis Muilenburg (who has since been fired), during which he essentially told Muilenburg to back off on constantly providing a timeline of when the plane would return to service.
The FAA stressed that they were concerned that Boeing had an unrealistic timeline for the 737 MAX returning to service, and it seems like Boeing has finally gotten that message. In the press release about 737 MAX production stopping, they specifically state “the FAA and global regulatory authorities determine the timeline for certification and return to service.”
It seems logical enough that Boeing would finally stop 737 MAX production, given that they have 400 of these planes ready to go, even without certification. I’m happy to hear they won’t be laying anyone off, though I sure wonder how they’ll be reassigning people, given how many people work in 737 MAX production.
Also, they’re waiting several more weeks to share the financial impacts of this, so I can only imagine how bad it is…
Are you surprised to see Boeing finally suspend 737 MAX production?