Boeing to suspend production of its 737 Max jets

The fleet of jets has been grounded since March.

December 16, 2019, 6:25 PM

Boeing will suspend production of its 737 Max jets starting in January, the company announced Monday.

The company said no layoffs or furloughs are expected at this time as a result of the decision.

The decision comes after Boeing board members met Monday to consider suspending or shutting down production of its 737 Max jets, which have been grounded for almost nine months.

"We believe this decision is least disruptive to maintaining long-term production system and supply chain health," Boeing said in a statement Monday evening.

"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," the statement added. "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," the company added.

The Wall Street Journal first reported Sunday that the company could possibly end production of the beleaguered fleet of jets, sending shares of Boeing to tumble nearly 4% on Monday.

Governments and airlines around the world have grounded 737 Max aircraft since March after two crashes occurred within six months of each other -- in October 2018 and March 2019 -- that killed a total of 346 people.

PHOTO: A Boeing 737 MAX during a media tour of the Boeing 737 MAX at the Boeing plant in Renton, Wash., Dec. 8, 2015.
A Boeing 737 MAX during a media tour of the Boeing 737 MAX at the Boeing plant in Renton, Wash., Dec. 8, 2015.
Matt Mcknight/Reuters, FILE

In November, the Federal Aviation Administration signaled the fleet might not be returning to the skies anytime soon.

"The agency will not approve the aircraft for return to service until it has completed numerous rounds of rigorous testing," the agency said in a statement. "The FAA will take all the time it needs to ensure the aircraft is safe."

Following Boeing's announcement Monday, the FAA said it does not comment on the company's business decisions, but the "agency is following a thorough process for returning the Boeing 737 MAX to passenger service" and it has "set no timeframe for when the work will be completed."

The crashes and subsequent groundings have been costly for Boeing and spurred a slew of lawsuits.

The Southwest Airlines' pilots union filed a lawsuit against the company in October for $100 million over lost wages after the Max jet troubles forced the grounding of more than 30,000 Southwest flights.

Boeing also reached an undisclosed, partial settlement from a separate lawsuit from Southwest Airlines, the largest U.S. operator of the Max jets, The Associated Press reported.

Boeing also announced a $100 million fund for families of victims who died in the crashes, and in September, began giving out $144,000 per family of each victim of the crash. Families don't have to waive their right to sue Boeing in order to be eligible to receive the funds.

PHOTO: Aerial photo showing Boeing 737 Max airplanes parked at Boeing Field in Seattle, Washington, Oct. 20, 2019.
Aerial photo showing Boeing 737 Max airplanes parked at Boeing Field in Seattle, Washington, Oct. 20, 2019.
Gary He/Reuters

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