More 737 Max fallout: Boeing to halt plane's production in January, temporarily

Dawn Gilbertson | USA TODAY

Show Caption Hide Caption FAA chief: No quick return to service of 737 Max FAA Administrator Stephen Dickson told House lawmakers the return of the Boeing 737 Max to service "is not guided by a calendar or schedule," suggesting that regulators won't clear the airplane to fly again for months. (Dec. 11)

Boeing has planned a temporary shutdown of production of its 737 Max in January, as the timing of the grounded plane's return remains murky more than nine months into the plane's safety crisis.

The company said in a statement it does not plan layoffs or furloughs at this time, but provided no other details on how long it will halt production.

"We will continue to assess our progress towards return to service milestones and make determinations about resuming production and deliveries accordingly,'' Boeing said.

Boeing's stock fell 4.3 percent Monday following weekend reports by the Wall Street Journal and others that it was planning production cuts or a temporary suspension of production.

Beyond the impact on Boeing's finances, there are broader economic concerns. Airplanes are made up of a huge number of parts from myriad suppliers, and the lack of production could hurt those companies and their workers and communities.

The decision is unlikely to affect travelers, since airlines had already planned on delays in receiving their shipments of 737 Max planes.

Boeing cut production of the Max from 52 planes a month to 42 in mid-April, a month after the plane was grounded following two crashes that killed 346 people.

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The manufacturer has kept that production pace throughout the year, building an estimated 400 Maxes that must be stored and can't be delivered to the airlines who ordered them — a growing financial drain.

Boeing CEO Dennis Muilenburg warned during the company's earnings call in late October that it might need to reduce the Max production rate or temporarily shut down assembly if the timetable for the plane's return was delayed, though the company didn't expect that to happen.

As recently as November, Boeing appeared confident the FAA would certify its software fixes for the troubled plane this year and that it could resume deliveries of new Max planes to airlines in December, with the plane returning to commercial service in January.

But the timetable for the plane's return slipped last week, as it has multiple times since the grounding, with the recertification process now expected to stretch into 2020.

The FAA has repeatedly said there is no timetable for the ungrounding, something agency administrator Steve Dickson reiterated last week during a House committee hearing on the Max crisis and in a follow-up meeting with Muilenburg on Thursday.

Dickson called the meeting because he was concerned Boeing was pursuing an unrealistic return-to-service schedule, according to an email sent to the House and Senate oversight committees.

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Dickson was also concerned that some of Boeing's public statements on the plane's return were designed to force the FAA into taking quicker action, according to the email. Dickson told Muilenburg Boeing's focus should be on the "quality and timeliness of data'' submitted to the FAA for review ahead of any ungrounding of the Max, according to a recap of the meeting sent to the committees.

In October, when the company thought approval for the plane to fly again was near, Boeing said it planned to gradually increase the 737 production rate after the ungrounding, from 42 per month to 57 per month by late 2020.

Airlines aren't taking any chance with the moving target that is the plane's return to the skies, repeatedly taking the plane out of their schedules further into the future as the grounding continues. The goal: reduce last-minute flight cancellations. Those happened frequently during the early days of the grounding, when airlines were scrambling to accommodate travelers with a suddenly smaller fleet.

American Airlines last week removed the Max from its schedule until April 7, meaning the plane will have been out of its fleet for more than a year. American said it will proactively cancel 140 daily flights in March and early April as a result. American had 24 of the planes in its fleet at the time of the grounding and was due to have a total of 40 by the end of this year.

Southwest and United, the other two U.S. operators of the Max at the time of the grounding, currently have the plane scheduled to return in early March, but are expected to follow American in pushing that date back.

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