Boeing To Halt Production Of 737 Max; Impact On Spirit Uncertain
CHICAGO — Boeing Co. said Monday that it will temporarily stop producing its grounded 737 Max jet starting in January as it struggles to get approval from regulators to put the plane back in the air.
The Chicago-based company said production would halt at its plant with 12,000 empoyees in Renton, Washington, near Seattle.
Boeing said it doesn't expect any layoffs as a result of the production halt "at this time." But layoffs could ripple through some of the 900 companies that supply parts for the plane.
The company's largest supplier is Spirit AeroSystems in Wichita, which builds about 70 percent of the 737. Spirit is also the city's largest private employer.
The company said in a statement:
"Following the announcement from Boeing that they would temporarily halt production of the 737 MAX, we are working closely with our customer to determine what that means for Spirit. As decisions are made on how to best mitigate this additional impact, we will communicate any new information to employees and other stakeholders."
Earlier this year, Spirit furloughed some employees one day a week for 10 weeks to reduce costs. It has continued to produce 52 737 fuselages a month, despite Boeing reducing its own production rate. Spirit is stacking excess fuselages on its south Wichita campus; the company had 90 of them stored near the McConnell Air Force base as of last week.
The Max is Boeing’s most important jet, but it has been grounded since March after crashes in Indonesia and Ethiopia that killed total of 346 people. Federal regulators told the company last week that it had unrealistic expectations for getting the plane back into service this year.
In a statement, Boeing said it will determine later when production can resume.
“We believe this decision is least disruptive to maintaining long-term production system and supply chain health,” the statement said.
The company's stock has fallen 23% since the March 10 crash of a Max flown by Ethiopian Airlines.
Spirit's stock fell about 1.5% in trading Monday.