Boeing CEO says 737 Max production might pause
DALLAS — Boeing’s CEO says the company will consider temporarily shutting down production of the 737 Max if the plane’s return is significantly delayed beyond the company’s October forecast.
The comment by Chairman and CEO Dennis Muilenburg underscores the uncertainty swirling around the company and its best-selling plane, which has been grounded since March after two deadly crashes.
Boeing reported Wednesday that it suffered its biggest quarterly loss in at least two decades, nearly $3 billion, as it absorbed financial damage caused by the Max. Revenue plunged 35 percent after Boeing halted deliveries of any new Max jets.
The huge second-quarter loss was expected. Boeing removed much of the suspense from earnings day when it announced last week that it would take a $4.9 billion after-tax charge for the Max. The charge was calculated from Boeing’s estimate of the cost of compensating airlines for lost use of their Max planes for several months. It did not include Boeing’s potential liability from dozens of lawsuits filed by relatives of the 346 passengers who died in the two crashes.
Boeing is updating U.S. and foreign regulators daily on its work to fix the plane. Based on those discussions, the company said last week that it expects the Max to resume flying early in the fourth quarter.
The Max assembly line near Seattle has stayed open, although at a reduced rate. The company even hopes to boost production gradually from the current 42 a month to 57 a month next year, but that assumes the plane will fly and Boeing will soon resume deliveries to airlines.
“If that estimate of (an October) return to service substantially changes, then we’ll have to consider alternatives,” Muilenburg said. “Those alternatives could include different production rates, they could include a temporary shutdown of the line.”
Muilenburg’s comments implied that the Federal Aviation Administration can review the company’s changes to flight-control software in one month. The FAA has already been analyzing much of Boeing’s work. An FAA spokesman said the agency has no preconceived timeline for returning the Max to service.
The grounding of Boeing’s plane has caused airlines including American, United and Southwest to cancel thousands of flights into early November.
