Boeing to halt the production of 737 Max from January onward

The complications regarding the Boeing 737 have worsened for the American airplane manufacturer with it announcing that the 737 MAX will no longer be produced from January onwards. The recent announcement following the two fatal crashes marks the first time for the company in two decades that the production of 737 has entirely stopped.

Boeing’s Decision To Halt 737 Max Production Will Manifest On The U.S Economy

The company also highlighted that around 12,000 employees that were involved in the 737 production will not be laid off. In the post-production halt period, however, Boeing’s supply chain is likely to take a blow that will manifest on the U.S economy at large.

Boeing had previously expressed confidence that the Federal Aviation Administration (FAA) will soon clear the jet for public flights. Following FAA’s recent announcement that the 737 Max is likely to remain under scrutiny in 2020, however, the two-day board meeting decided that the company will no longer produce the 737 Max from January.

The two fatal crashes, first in Indonesia and then in Ethiopia, happened within a short period of five months and caused 346 deaths. Boeing’s 737 Max was grounded right after the second accident in March and has cost around $9 billion to the manufacturer so far.

As per the experts, the airlines for which the deliveries were already halted may not be affected much. Others, however, will have to cancel many flights and look for older replacements. But the impact of the crisis is the most prominent on the manufacturer itself that saw its fastest-selling jet globally banned for public flights, a huge stigma on its safety track record, loyal customers pushing for compensation, and its relationship with the Federal Aviation Administration under a threat.  

Boeing Has Been Producing The 737 Max Jets Despite The Grounding

Despite the grounding since March, Boeing has been producing the 737 Max jets (42 per month) and has received the required parts from supplies (52 units per month). Onwards of January, the production will now be on a complete halt with no further information regarding its return divulged at the moment.

Calling it a business decision, the FAA refrained from commenting on the news and reiterated that the primary concern for the regulator is to ensure public safety. Owing to the complications, Boeing’s stock has dropped sharply in the past month. From $370 in mid-November, the stock is currently trading at $327. According to the experts, the loss is likely to deepen for Boeing once the production halts in the upcoming year.