SEATTLE – Nine months after the Federal Aviation Administration (FAA) grounded the 737 Max, Boeing finally pulled the plug on the jet's production Monday. The company announced it is temporarily halting the assembly lines in Renton, Wash., from January, with no timeline defined for a restart.
However, there is good news for the 12,000-strong Renton workforce: Boeing will preserve their jobs by keeping some on 737 work and redeploying the rest to other facilities in the region.
"During this time, it is our plan that affected employees will continue 737-related work, or be temporarily assigned to other teams in Puget Sound," Boeing said in a statement. "As we have throughout the 737 Max grounding, we will keep our customers, employees, and supply chain top of mind as we continue to assess appropriate actions."
The company said that during the slowdown in production over the past nine months, it has been able to fix issues with the production system and allow suppliers that were lagging to catch up, and it intends to have some employees working on efforts to sustain those gains.
A Boeing insider briefed on the decision said the Renton factory's manufacturing operation is Boeing's crown jewel. "It's an amazing facility," he said. "You try to keep the team together as best you can. They all still have jobs.
"I think it's the right thing to do," he added. "We care about our workforce."
The insider said Boeing didn't announce any timeline for the production stoppage because it has no control over the jet's return to service. "The FAA has a lot more control than we do," he said. "When it's time to get back, we will."
Though Boeing had been hoping for approval to fly the Max again by year end, last week FAA Administrator Steve Dickson pushed that expectation into next year and told Boeing CEO Dennis Muilenburg to back away from public statements suggesting otherwise.
Officials privately identified mid-February as the new target for FAA clearance. Assuming no further slips in the schedule, that still extends the Max's grounding to almost a year. The Max was grounded worldwide on March 13 following two fatal crashes in just over four months that killed 346 people.
The decision was finalized at a meeting of the company's board in Chicago.
With the stoppage in Renton, parts of the 737 supply chain may also grind to a halt, which is disruptive to the finely tuned global production system.
Anticipating Boeing's announcement, the market slammed the jet maker's share price Monday even as the Dow reached a record high. The stock fell nearly $15, or 4.29% for the day, closing at $327.