Boeing to Shut Down 737 MAX Production

US economy likely to feel the effects
By Bob Cronin,  Newser Staff
Posted Dec 16, 2019 5:45 PM CST
Boeing to Shut Down 737 MAX Production
A Boeing worker walks near a 737 Max on Monday in Renton, Washington.   (AP Photo/Elaine Thompson)

With its backlog of 737 MAX planes growing to about 400, Boeing plans to suspend production of the grounded airliner next month. The company has lacked regulator approval to fly the plane since March, after two of the jets crashed and killed a total of 346 people. Layoffs aren't planned at the Washington assembly plant that has 12,000 workers, the Wall Street Journal reports, but the effects are likely to be widespread. "It would be hard to have any other single company stop the production of a single product and have it hit the economy as hard as this would," an analyst said, predicting that domestic GDP growth in the first quarter could lose 0.3 of a percentage point. GE, which makes engines for the 737 MAX, had already said the grounding could exact as much as a $1.4 billion hit on its cash flow this year.

Boeing had hoped regulators would allow the plane's return by the end of the year, but was told last week that won't happen before February. Airlines have had to cancel thousands of flights and have lost hundreds of millions of dollars, per CNBC. Southwest has reached a settlement with Boeing and plans to pass $125 million along to its employees. But the airline's pilots say that's not enough to make up for their lost wages and plan to recover more through a lawsuit, a step that flight attendants unions also are considering. Boeing did not say how long the production freeze would last; the plant has been turning out about 40 737 MAX planes per month even during the grounding. (An FAA analysis predicted more crashes unless Boeing repaired the plane's automatic flight-control system.)

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