Boeing halts production of 737 MAX
Struggling to contain an escalating corporate crisis, Boeing on Monday announced a halt in production of the 737 MAX - what had been its best-selling jet.
That plane has been grounded since March after two crashes in five months killed 346 people.
The decision to suspend production followed a two-day board meeting and news last week the Federal Aviation Administration would not approve the plane's return to service until well into next year.
This has been one of the must tumultuous periods for Boeing.
CEO Dennis Muilenberg had his chairman role stripped from him as a result of questionable decisions leading up to and after the crash of a LionAir Jet in October 2018 and an Ethiopian Air jet in March…
and he was forced to answer for the company's mistakes in front of Congress.
SOUNDBITE (ENGLISH) BOEING CEO DENNIS MUILENBERG, (OCTOBER 29, 2019)SAYING:
"I'm grateful and humbled to be here today and to be able to say these words to the families directly and I want to convey our absolute commitment to safety, our commitment to learning, our commitment to rebuilding the public's confidence in what we do, and to preventing accidents like this from ever, ever happening again."
But critics say Muilenberg has been slow to accept blame or outright admit something was wrong with its MCAS software, which safety inspectors say contributed to both crashes.
Halting production will ease a cash crunch as nearly 400 737 MAX jets sit finished but undelivered to airlines not willing to pay or take delivery until the FAA signs off.
Boeing says it doesn't expect to layoff or furlough any of the 12,000 workers at the 737 factory located in Seattle.
But Monday's decision will have repercussions beyond its factory floor, says aviation analyst Henry Harteveldt.
SOUNDBITE (ENGLISH): HENRY HARTEVELDT, PRESIDENT, ATMOSPHERE RESEARCH GROUP, SAYING:
"Suspending production of a commercial aircraft is something that has been very rarely done. It truly is an unprecedented decision, and it is one that has massive impact to Boeing, and its suppliers, and the airlines. And we don't know how long that would be - is really going to create some chaos for the airlines that are involved in this, as well as the 600 or so companies that are part of the 737 MAX supply chain and Boeing itself. It's going to have substantial impact on the U.S. economy, and, as it already has, I think, it will affect our trade deficit. I think it potentially could exacerbate that in the short-term."
Boeing shares fell over four percent Monday ahead of the expected announcement.
The stock has lost more than 20 percent of its value since the March crash.
