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March 26, 2020

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Production of embattled 737 MAX to soon resume

Boeing plans to restart 737 MAX production by May, ending a months-long halt triggered by a safety ban on its bestselling jet following two fatal crashes, people familiar with the matter said.

Boeing’s planning hinges on the scale of disruptions from the fast-spreading coronavirus pandemic, and American regulators clearing the 737 MAX to return to service, a milestone Boeing still expects to reach in mid-2020.

One industry source said Boeing has asked some suppliers to be ready to ship 737 parts in April. Another person said production is planned to resume in May.

A third person said the pandemic is throwing a monkey wrench into Boeing’s plans — the company initially hoped for April but May seems more realistic.

“It’ll be a very slow, methodical, systematic approach to warming the line up and getting crews back in place,” said Boeing Chief Financial Officer Greg Smith. “Priority one is getting customers’ fleets back up,” adding that a production ramp up will be paired with clearing the MAX backlog. “We don’t want to add to inventory.”

Boeing ceased production of the jet in January as it struggled to win regulatory approvals and accrued a backlog of 400 undelivered jets.

The pandemic has shattered global travel demand, upended lives for millions and wiped billions off Boeing’s market value, compounding a year-old crisis over the grounding of the 737 MAX after crashes in Ethiopia and Indonesia killed 346 people.

Boeing announced it will halt production to reduce viral risks in its Washington plants beginning next week.

The company has reported dozens of cases in its Seattle-area facilities, many of which came from its Everett hub north of Seattle. One worker died from the virus, according to a friend’s Facebook tribute.

Boeing told suppliers to halt shipments to its Seattle-area facilities and has frozen hiring among other cash-saving measures. The company and the embattled American aerospace supply chain are seeking US$60 billion in government aid to prop up finances. Boeing has used the production lull to curb inefficiencies, improve quality and ease the plane’s re-entry to the market.


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