Boeing says production will remain suspended at Seattle factories until further notice

Boeing says production will remain suspended at Seattle factories until further notice

  • Boeing says its Seattle factories will remain closed until further notice.
  • 135 employees of the plane manufacturer have so far tested positive for COVID-19.
  • Avolon cancels order for 75 737 Max aircraft that Boeing was scheduled to deliver by 2023.

The rising cases of Coronavirus in the United States had pushed Boeing into announcing a shut down of its Seattle-area factories in March to minimize the fast spread of the flu-like virus and protect its employees against the health hazard. As the virus continues to spread across the U.S, Boeing (NYSE:BA) said on Monday that production at Seattle factories will now remain suspended for an indefinite period.

Boeing’s factories in Seattle are dedicated to the production of its wide-body aircraft. The company had initially announced a two-week shutdown. On Monday, however, the largest U.S airplane manufacturer said that the shutdown is extended until further notice. Boeing said:

“These actions are being taken in light of the company’s continuing focus on the health and safety of employees, current assessment of the spread of COVID-19 in Washington state, the reliability of the supply chain and additional recommendations from government health authorities.”

Boeing Has So Far Reported 135 Coronavirus Cases

Boeing’s spokesman also reiterated that the move does not apply to its 787 factories located in South Carolina. Employing roughly 160,000 workers, Boeing has so far reported 135 confirmed cases of Coronavirus at its factories.

Boeing had recently applied for government aid worth £48.77 billion ($60 billion). The U.S Congress approved the £1.63 trillion ($2 trillion) Coronavirus stimulus bill in the last week of March. The relief package, however, didn’t initially specify the funds targeted at the airline industry.

Boeing’s financial challenges are piling up since its world-renowned 737 Max jetliner was grounded in March 2019 after two fatal crashes that killed 346 people. As the pandemic further halts production at its factories, Boeing is now resorting to cost-cutting strategies. The company suspended dividend payments in March and is currently offering voluntary leaves to its employees to further cut on expenditure.

Avolon Cancels Order For 75 737 Max Aircraft

One of the leading airplane-leasing companies, Avolon, also canceled its order on Friday for four Airbus A330 jets and 75 737 Max that Boeing was scheduled to deliver by 2023.

At £111.69, Boeing is currently trading around 60% down year to date in the stock market. Owing to the 737 Max tragedy, its performance in 2019 wasn’t reported any better with the stock keeping almost flat on average last year.

At the time of writing, Boeing has a market cap of £63 billion.  

By Wajeeh Khan
Mr. Khan specialises in Public Health by academia but is a trader by passion. Taking up two new hobbies of writing and trading in his teen years, he is now a professional trader and news writer with over 5 years of experience in various financial markets. Khan is passionate about bringing insightful articles to his readers and hopes to add value to their portfolios.

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