Boeing suspends 737 MAX production starting in January due to certification moving into 2020

In a statement (read below), Boeing says it will suspend its 737 MAX production starting in January. Reason for the suspension is the (re-)certification of the aircraft moving into 2020.

By reducing production, the American manufacturer wants to give priority of stored aircraft delivery. Boeing doesn’t expect any layoffs or furloughs in the near future.

Twelve thousand workers of the Renton plant will be temporarily without a job; only a few of them can be relocated to other plants.

The Boeing 737 MAX has been grounded for 278 days.

Apparently the Boeing tactics of putting pressure on the FAA to re-certify the MAX as soon as possible has backfired, as the FAA now wants to regain control on all the steps of the procedure and avoid that Boeing auto-certifies some elements.

Boeing statement regarding 737 MAX production

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.

Throughout the grounding of the 737 MAX, Boeing has continued to build new airplanes and there are now approximately 400 airplanes in storage. We have previously stated that we would continually evaluate our production plans should the MAX grounding continue longer than we expected. As a result of this ongoing evaluation, we have decided 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.

During this time, it is our plan that affected employees will continue 737-related work, or be temporarily assigned 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.

We will provide financial information regarding the production suspension in connection with our 4Q19 earnings release in late January.