12162019_teaser_tzr_140408-780x501.jpg


Nine months after the Federal Aviation Administration (FAA) grounded the 737 MAX, Boeing finally pulled the plug on the jet’s production Monday. The company announced it’s temporarily halting the assembly lines in Renton from January, with no timeline defined for a restart.

However, there is good news for the 12,000-strong Renton workforce: Boeing will preserve their jobs by keeping some on 737 work and redeploying the rest to other facilities in the region.

“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,” Boeing said in a statement. “As we have throughout the 737 MAX grounding, we will keep our customers, employees, and supply chain top of mind as we continue to assess appropriate actions.”

“We believe this decision is least disruptive to maintaining long-term production system and supply chain health,” the statement said.

In a message that went out Monday afternoon to Renton employees, the new head of Boeing Commercial Airplanes Stan Deal said it was “a decision not taken lightly.”

“Throughout the MAX grounding, we continued to produce and store airplanes because we felt this was in the best interests of our teammates, our customers, the production system and supplier partners,” Deal wrote. He said the shift to suspending production was driven by “the extension of certification into 2020, the uncertainty about the timing and conditions of return to service and global training approvals among other factors.”

The company said that during the slowdown in production over the past nine months, it’s been able to fix issues with the production system and allow suppliers that were lagging to catch up, and it intends to have some employees working on efforts to sustain those gains.

A Boeing insider briefed on the decision said the Renton factory’s manufacturing operation is Boeing’s “crown jewel.”

It’s an amazing facility,” he said. “You try to keep the team together as best you can. They all still have jobs.”

“I think it’s the right thing to do,” he added. “We care about our workforce.”

The insider said Boeing didn’t announce any timeline for the production stoppage because it has no control over the jet’s return to service. “The FAA has a lot more control than we do,” he said.  “When it’s time to get back, we will.”

Though Boeing had been hoping for approval to fly the MAX again by year end, last week FAA Administrator Steve Dickson pushed that expectation into next year and told told Boeing CEO Dennis Muilenburg to back away from public statements suggesting otherwise.

Officials privately identified mid-February as the new target for FAA clearance. Assuming no further slips in the schedule, that still extends the MAX’s grounding to almost a year. The MAX was grounded worldwide on March 13 following two fatal crashes in just over four months killed 346 people.

Boeing’s statement said the decision to stop production “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.”

“We will continue to assess our progress towards return to service milestones and make determinations about resuming production and deliveries accordingly,” the statement added.

Deals’ message to employees said that the halt to production means Boeing “will prioritize the delivery of completed aircraft rather than feeding more airplanes into production.”

He said that “will put our system in a better position to recover and more efficiently deliver completed airplanes once we safely return the 737 MAX to service.”

The decision was finalized Monday at a meeting of the company’s board in Chicago.

With the stoppage in Renton, parts of the 737 supply chain may also grind to a halt, which is potentially very disruptive to the finely tuned global production system.

 

Anticipating Boeing’s announcement, the market slammed the jetmaker’s share price Monday even as the Dow reached a record high. The stock fell nearly $15, or 4.29% for the day, closing at $327.



Source link

About the Author:

Leave a Reply