Daily Management Review

Boeing Could Halt 737 MAX Production


FAA thinks Boeing’s “public statements” are “designed to force FAA into taking quicker action”, while the company is facing the dilemma of whether to stop the 737 MAX production or not.

Boeing is seriously thinking about if its needs to stop manufacturing the “737 MAX” following the last week’s Federal Aviation Administration’s stance of not approving the “plane’s return to service before 2020”.
To take a call on the matter, Boeing, the largest plane manufacturer in the U.S., has been conducting a two days long meeting, while the announcements could come anytime now. There are expectations that the top management may instruct a temporary halt on 737 productions; although it might take “a few weeks before production could be halted”.
According to a statement of Boeing, it “will continue to assess production decisions based on the timing and conditions of return to service, which will be based on regulatory approvals and may vary by jurisdiction.”
However, the company had also informed that in case it did not have a green signal on the 737 production by the year end, it could have no other option but to “further slow production or temporarily shut down” the same, while the repercussions of it will be felt globally across its supply chain.
Ever since the month of March, the best-selling plane of Boeing has been ground following “two fatal crashes”, one in Indonesia, another in Ethiopia, which claimed nearly 346 lives. According to Reuters:
“On Thursday, Boeing abandoned its goal of winning approval this month to unground the 737 MAX after Chief Executive Dennis Muilenburg met with FAA Administrator Steve Dickson. Dickson said on Wednesday he would not clear the plane to fly before 2020 and disclosed the agency has an ongoing investigation into 737 production issues in Renton, Washington”.
Dickson also cautioned that “a dozen milestones” lay ahead to be attained before MAX can return to service. On the other hand, the U.S. authorities had informed Reuters that 737 manufacturing approval could be pushed to February or even to March.
FAA sent an email to the lawmakers, wherein Dickson is quoted to have told Muilenburg that:
“Boeing’s focus should be on the quality and timeliness of data submittals for FAA review. He made clear that FAA’s certification requirements must be 100% complete before return to service.”
Even though, Boeing expected to receive FAA approval on MAX deliveries by December, the American Airlines Group Inc informed that “it was extending cancellations of 737 MAX flights through April 6”. While Reuters reported that FAA sent an email to the congressional staff, wherein it said Dickson is “concerned that Boeing continues to pursue a return-to-service schedule that is not realistic... More concerning, the administrator wants to directly address the perception that some of Boeing’s public statements have been designed to force FAA into taking quicker action.”