Boeing Suspending 737 MAX Production

Filed Under: Misc.

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.”

Bottom Line

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?

Comments
  1. SO Disappointed in Boeing✈️
    Clear example of Oligarchy control of our country and the resulting weak govt oversight
    Specifically #RegulatoryCapture
    Still Bernie not the solution

  2. “Just recently FAA Administration Stephen Dickson” surely is a typo, as I don’t think FAA Administration is a title for a person 🙂

  3. Boeing is powerful and has for decades flaunted that power in Washington. The pressure on the FAA is there. This move puts pressure on the FAA further via corrupt, on-the-take politicians, especially in Washington State who will send their love notes to Steve Dickson at the FAA, viz. get it certified regardless of safety or else. That else really ought to focus on should the Max have another fatal accident within 1 or 2 years of re-certification then it’s curtains for a aging design hog that ought never have been allowed to fly in the first instance. The 737 is into it’s third or fourth generation. This last iteration has proven to be a flawed structural design that no software will fix. Also, Boeing will need 1 to 2 years to catch up on the deliveries. All those paid for aircraft and yet to be delivered Maxes will have to have any updates that the FAA mandates, from software to perhaps a new sensor. Still unknown is whether pilots will be required to undergo training via an I-pad or in a simulator. Then add in whether all countries will accept the FAA re-certification or give their own, like the European Air Safety Agency, Australia, Canada and China. It will take thousands of employees to deal with getting these aircraft delivered and prepping the ones on the ground that already are in service with airlines.

  4. And who was buying whatever production they had?

    Nobody. There were buyers but they cannot take delivery of the finished product. There are buyers who have open orders.

    Maybe this will give a push for the plane to be certificated again in February 2020?

  5. @ben

    Can you let us know if you end up getting more info about the jobs further down the supply chain? Boeing is internalizing the employees for now it seems but curious about some manufacturers that have been providing parts or services that now might be out of work as a result.

  6. That’s a nice economy you got going on there. It’d be a shame if someone were to wreck it in an election year. Boeing just called the FAA’s bluff. Watch the ripples in the market as the downstream effects are coming soon!

  7. This is just another of Boeing CEO blunder. Really?! You are being investigated after 300+ people are killed and for the entire 2019 year, production continued?

    That’s right, run the company down to the ground, dumb A$$!!!

  8. @Rob R is absolutely correct. Boeing still has some tricks up it’s sleeves. Boeing will go down and will drag our great nation’s defense down along with it.
    Guess who is supplying the F/A-18 to defend our carriers and bomb terrorists.
    Guess who is supplying the F-22 to suppress Chinese and Russians aggressors.
    Guess who is supplying AWACS to monitor (spy) everything both foreign and domestic.
    Guess who is supplying all our land based ICBMs as a nuclear deterrent counterstrike.

    Nope, Boeing hasn’t threatened it’s hostage yet.

  9. After Lion Air in 2018, the FAA itself estimated there would be 115 crashes of the 737 Max killing 2,900 people over the 45 year lifespan of this plane. See MoDo at the NYT on Sunday.

    Sully “Miracle on the Hudson” Sullenberger called the 737 Max a “death trap”.

    The arrogance on Boeing to build another 400 of these after the March grounding only shows how corrupt the certification process had become.

    These planes should be SCRAPPED.

  10. @ JB

    Do you even know where the max is built?
    Also the Max does fly around and land at various storage areas its just not certified for commercial use .

    The Max isn’t going to be scrapped either upstater, Also for those who have no idea what is going on, Jim McCnearney the last CEO of Boeing approved this model of 737 not Dennis Moulenburg which was only handed the keys to a lemon. So nobody will be held accountable since all the folks that signed the Max off all retired.

    And for you guys bashing the government, who was in charge when the MAX was certified
    OH wait it was Obama so keep up on talking fake news since most folks that speak up have no idea on whats really going on.

  11. Has anyone seen any stories on how several hundred missing airplanes have affected the cost of air travel? I haven’t noticed much change in fares. If the 737 Max shortage means that airlines are filling more seats on existing equipment, shouldn’t that mean higher profits (as well as cleaner air)? Or maybe the lowered supply of seats has reduced the demand for them. Stay-cations, trains and road trips instead?

  12. Boeing at present is like a deer blinded by a car’s headlights: The 737MAX saga gives them no clear visibility of the plane’s foreseeable future, the new 777 is not going well, they have additional problems with the older 737s and with some 787s, and they cannot define the NMA because its shape and timing so much depends on the 737 MAX.

    The NMA was always supposed to bridge the gap between the MAX and the 777. It’s hard to bridge a gap when you know neither its width nor its timing.

    Meanwhile, Airbus is stealing the show with the A321s Neo, LR and XLR. The NMA was also supposed to be a replacement for the 757. Bad news for Boeing, the 757 IS NOW REPLACED (by the A321 family) for a large number of carriers and there’s no need anymore for a replacement.

    Boeing won’t disappear, but over time it may very well become a military and space only company. They won’t be the first ones in America. Evoluting out of passenger transportation actually seems to be a well traveled road among former airliner builders.

  13. Slow your roll, Pierre. Boeing is still – by far – king of the widebody marketplace. 777X isn’t any more delayed than 777, A350, 787, A380 or any other non re-engine airliner project has been in decades. I don’t remember the development of the 767 or 330/340, but I assume they were also behind schedule.

    NMA is definitely being held hostage by MAX issues, but I’ve also seen plenty of airline execs saying the 321 is not the middle market plane they’re looking for… 757-300 had a capacity of more than 50 seats larger than a 321 in a single class configuration (only apples to apples comparison I can make), and by all accounts NMA start around the size of a 753/762 and have another model sized like the 763. 321XLR really only works as a direct 752 replacement, but NMA isn’t really meant to fill that role directly.

  14. @JB, they’re not all in Everett. They’re being stored in various locations including Renton, Boeing Field, Moses Lake and San Antonio.

  15. @Charlie

    It might be Lockheed that is delivering F-22, but large % of the parts and design are Boeing. That’s how things work with major military contracts.

  16. This is the result of a conspiracy fueled by Europe and China, fueled by spreading fake news. There is nothing wrong with these airplanes. I am rather disturbed that none of you seem to see through these tactics.

  17. Justin, watch your approach speed, Boeing is in trouble, now voted worse run company in 2019, as former USAF I have seen issues in the past with them oh be it 40 years ago. The once great culture is gone, “king of wide bodies” I find that title rapidly sliding into the past. It will take BA 10 years to get over this mess the’re in, 777 program falling apart as well. What happened there is criminal yet the politicians won’t do anything about it.

    Maybe what Boeing should do is outsource plane production and design to AirBus. Just a thought

  18. I’m certainly not an aeronautical engineer, but if a plane can’t fly without a computer adjusting for design flaws at all times then what would happen if the plane loses power and the computer can’t make those adjustments anymore? This plane seems very dangerous and I will personally go out of my way to never fly on this Frankenstein of a plane if or when it returns to service.

  19. @Dave Someone says something sexists and lose a job, some male actor grabs a young man’s butt, and forever shamed and lose job, someone says once something against African American, lose a job and most of his/her wealth, kill hunders of people , who cares , you are the ceo of Boeing.

  20. I’ve wondered often how circumstances would be different had two different 7M8s crashed.

    Perhaps a United one leaving Newark crashing in to an urban area and then an American one leaving Chicago again in an urban area.

    It was only luck that one of the death jets crashed into the sea and the other into the desert, had they been urban areas the story would have been very different and the need for stringent requirements before it flew again a cause for all.

    Well, it might fly again (I hope not) and if it does, it will be taking off over urban areas so those calling for speedy reintroduction should stop and think for a few minutes because it might be your house and family.

  21. I’m not convinced anything is wrong with the Max. It’s all very political. Anything associated with airlines, including crashes, usually is. I feel that Airbus is not held up to the same standards. Any accidents involving their aircraft first words from the powerful people are, airbases are fine move on. End of story.

  22. @John: So, if there is nothing wrong with these planes, why do they crash ? Bad luck ?

    Note: Bad luck happens: In 1954 (I think), 2 Air France DC4s crashed in the same spot 48 hours apart somewhere in Africa. The first one lost its bearings in a sandstorm. The 2nd was piloted by a Captain from the Foreign Legion with a terrible accent speaking French and a very junior First Officer. When the Captain said “Trente” (30 degrees flaps), the 2nd pilot understood “Rentre” (Flaps Up). Shit happens…

  23. They screwed up and the faa is dragging their feet on this. IMHO the board needs to fire some people suspend buybacks and dividends and use the money on two brand new planes. Discount the max to sell until the new planes are done

  24. What a cluster****. Boeing designs an unstable aircraft, bolts on a software “solution” designed to compensate for the inevitable problems, makes airlines pay extra if they want to buy “optional” parts of the system that are actually critical to its operation, and then pilots and airlines are left in the dark and undertrained in use of the system. And the FAA permits all of this to occur.
    This fundamentally flawed aircraft never should have gotten off the drawing board. If it is cleared to fly again, it will be dollars and cents over safety.
    Disgraceful.

  25. They chose short term profits by not investing to create a new plane. I do not feel bad for the company. Unfortunately the top C-suite got all of those bonuses years ago when they chose the cheap route. This is now punishing good people. Still, the plane should be permanently grounded as it has critical design flaws. I say retrofit these planes into regular 800s which is the ‘max’ of what that plane should ever do.

  26. the engine technology wasn’t there for a new plane, it still isn’t. remember the a319/320 is one stretch away from the same oops. It takes billions to design a plane, and the board felt IMHO the billions was better spent buying shares back and dividends. Before you jump on the Profit first bandwagon, if you have a 401K or any other retirement vehicle you benefit from profit.

  27. What is in your view the most practical solution for Boeing?

    1. Modify or outright install new engines on all MAXes?
    2. Re-design the wing / would a new wing tip solve the aerodynamics?
    3. Re-design vertical stabilizer?

    Any or all of the above + re-brand. Any thoughts?

  28. Boeing should just scrap the entire MAX project, refund all the airlines, and start from scratch with safety in mind.

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