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Boeing wants to resume 737 Max production months before the planes return to service

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Via CNBC

Dave Calhoun, Chairman of Boeing.

Adam Jeffery | CNBC

Boeing‘s new CEO, Dave Calhoun, said Wednesday that he wants the company to resume production of the 737 Max months before regulators sign off on the planes and airlines prepare to return them to service.

Boeing suspended production of the planes this month because a worldwide grounding of the jetliners after two fatal crashes lasted months longer than expected. Boeing shares fell more than 3% on Tuesday after the company pushed back its estimate of when regulators would sign off on the planes by months to the middle of 2020.

The 737 Max production shutdown has already cost thousands of jobs and raised concerns about the crisis’ impact on the broader economy.

But Calhoun’s comments indicate the company does not expect the production pause to last more than a few months.

“We got to get that line started up again,” he said on a conference call with reporters. “And the supply chain will be reinvigorated even before that.”

Boeing shares were down 1.6% in afternoon trading, bringing their weekly losses to nearly 5%.

The 737 Max crisis has rippled through Boeing’s supply chain, which includes General Electric and Spirit AeroSystems. Treasury Secretary Steven Mnuchin earlier this month estimated that the issues stemming from the plane’s grounding could shave half a percentage point off U.S. economic growth this year.

Wichita, Kansas-based Spirit AeroSystems on Jan. 10 announced it would cut an initial 2,800 jobs because of the Max grounding.

Calhoun said Wednesday that Boeing is not planning to lay off or furlough any of its employees because of the production pause, even with Boeing’s new estimate that regulators will approve the planes again midyear.

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Calhoun, a decadelong Boeing board member who took the helm of the manufacturer last week, is tasked with steadying the company, shaken by the 737 Max upheaval.

Internal emails that were recently made public revealed employees boasted about bullying regulators into accepting less time-consuming pilot training before officials allowed Boeing to deliver the planes to airlines. In other messages, Boeing employees expressed safety concerns about the plane. In the wide-ranging call with reporters, Calhoun said he intended to improve the company’s culture and lift employee morale.

A flight-control system Boeing included in the jets was implicated in the two Max crashes — a Lion Air flight in October 2018 and an Ethiopian Airlines flight less than five months later — which killed all 346 people on board. Boeing is now scrambling to get regulators to sign off on changes to that software and other fixes to the plane.

The Federal Aviation Administration has said several times that it doesn’t have a firm timeline to recertify the planes.


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