This archive report was first published on 17 December 2019.
December 17, 2019
Boeing Co has announced that it will suspend production of its best-selling 737 MAX jetliner in January, a move that marks a deepening of the crisis surrounding the aircraft.
The decision, made at a two-day board meeting, comes after the Federal Aviation Administration (FAA) refused to approve the jet's return to service before 2020, delivering a public rebuff to Boeing's hopes of moving faster.
The 737 MAX has been grounded since March after two crashes in Indonesia and Ethiopia killed 346 people within five months, costing the plane manufacturer more than $9 billion so far.
Boeing will not lay off any of the roughly 12,000 employees at its Renton, Washington facility during the production freeze, but the move could have repercussions across its global supply chain and the U.S. economy.
House Representative Rick Larsen called Boeing's decision 'a body blow to its workers and the region's economy.'
Boeing's shares closed down 4% on Monday and fell 1% after hours, while shares in Spirit AeroSystems Holdings Inc, its biggest supplier, fell 2%.
Analysts highlighted General Electric Co, Safran and Senior Plc as other suppliers that could experience disruptions.
Southwest Airlines, the largest 737 MAX customer, said last week it had reached a compensation agreement with Boeing for a portion of a projected $830 million hit to operating income in 2019 from the grounding.
