Boeing cuts MAX 8 production by 19%
- Boeing is cutting production of the 737 MAX 8 by 19% from 52 planes per month to 42 beginning in mid-April while it continues work on a software fix to avoid the malfunction that resulted in two fatal crashes of passenger planes, Boeing CEO Dennis Muilenburg announced Friday in a statement.
- The company said its production teams will keep the same employment levels. Suppliers may see the slowdown as a welcome break in the pace, analysts confirmed to the Seattle Times. Boeing supply chain has historically had trouble keeping up with the company's ambitious production targets.
- "We are coordinating closely with our customers as we work through plans to mitigate the impact of this adjustment. We will also work directly with our suppliers on their production plans to minimize operational disruption and financial impact of the production rate change," Muilenburg said.
Before the two crashes, Boeing was about to up production of the MAX 8 to 57 planes per month and suppliers were likely gearing up. But at least one Boeing supplier is ostensibly unphased by the announcement. Though the market is less sure of Spirit AeroSystems' future, the maker of shipsets for the MAX 8 released a statement Friday confirming it would continue deliveries at the 52 planes-per-month pace, but will store them at Spirit facilities.
"Spirit and Boeing have agreed to work together to minimize the disruption to Spirit operations and the supply chain," said Spirit AeroSystems CEO Tom Gentile. "This staggered production approach allows us and our supply base to better prepare for and support 737 production." The supplier will deal with excess labor by reducing contractors and overtime, "minimizing" the impact on full-time workers.
At Boeing, Muilenburg said a software fix is on the way.
"We now know that the recent Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents were caused by a chain of events, with a common chain link being erroneous activation of the aircraft's MCAS function. We have the responsibility to eliminate this risk, and we know how to do it. As part of this effort, we're making progress on the 737 MAX software update that will prevent accidents like these from ever happening again," the CEO said in his statement.
He further added the company's board of directors has begun to stand up an outside committee to complete a full review of Boeing's "company-wide policies and processes for the design and development of the airplanes we build."
The backlog of MAX 8 orders is still 4,600-long, according to the Seattle Times.
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