Boeing Co. said Monday that it will temporarily stop producing its 737 Max jet starting in January as it struggles to get approval from regulators to fly the planes again.
The decision comes nine months after the Federal Aviation Administration grounded 737 Max planes in response to two deadly crashes — one in Indonesia and another in Ethiopia — that killed 346 people in a six-month period. The crashes raised safety questions about the Max planes’ automatic stabilizing software and how it was certified by the FAA.
The Chicago-based company said production would halt at its plant with 12,000 employees in Renton, Washington, near Seattle, according to the Associated Press. The company doesn’t expect any layoffs as a result of the production halt “at this time,” the company said in a statement.
The 737 Max is Boeing’s most important aircraft, representing tens of billions of dollars in annual sales. With the company still unable to win approval from global regulators to let the plane back into the air, by halting production executives and board members have made one of the most consequential decisions in the manufacturer’s more than 100-year history.
Boeing is America’s largest manufacturing exporter and the largest component of the Dow Jones industrial average, and its decision to halt production is likely to send shocks through the American economy. The company’s stock closed at $327 Monday, down more than four percent.
The decision to halt production will affect suppliers around the country and plunge the company deeper into crisis.
“It will have enormous ripple effects,” Susan Houseman, director of research for the Upjohn Institute for Employment Research, told the New York Times. “It will have very real effects on many people’s lives, and it’s never good for this to happen right before the holidays.”
American Airlines, Miami International Airport’s largest carrier, has 24 Boeing 737 Max planes, all of which were based in Miami before the grounding. Since March the airline has been shifting its other planes around to cover the gaps in service. The company estimates 140 flights per day have been cut as the Max remains nonoperational.
American Airlines has another 76 Boeing 737 Max planes on order.
On Thursday, American announced that it aimed to get its 737 Max planes back in the sky by April 2020, based on the company’s conversations with the FAA. That’s a significant delay in the timeline; in October the company estimated it would have the Max planes back in business by January 2020.
New FAA Administrator Steve Dickson testified before the House Transportation Committee last week, the latest in a series of congressional hearings about the FAA’s certification process. Lawmakers grilled Dickson about the agency’s own report from November 2018 — after the first fatal crash — that concluded that as many as 15 similar crashes would happen over the 737 Max’s decades-long life span if no changes were made to its auto-stabilization system.
Dickson defended the agency.
“You know, it’s hard to Monday morning quarterback these things, as you know,” he said. “And I believe that the individuals who were involved in making the decision were acting on the best information they had at the time.”
An FAA spokesperson said Monday the agency does not comment on Boeing business decisions.
“The agency is following a thorough process for returning the Boeing 737 MAX to passenger service. We continue to work with international aviation safety regulators to review the proposed changes to the aircraft. Our first priority is safety, and we have set no time frame for when the work will be completed,” said the spokesperson.
Material from Miami Herald wire sources was used in this report.
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