Aerospace concern Boeing officially suspended the production of aircraft -

Aerospace concern Boeing officially suspended the production of aircraft

Concern Boeing has suspended production of aircraft model 737 MAX.

Aerospace concern Boeing officially suspended the production of aircraft

The concern’s statement said the assembly line in Renton, Washington, “temporarily stopped building the best-selling Boeing aircraft.” This news led to a 4 percent drop in the company's stock markets. Back in December, Boeing announced plans to suspend production of this type of aircraft for an indefinite period. However, then the exact day the conveyor stopped working was not reported.
It became known that the assembly line of the Boeing 737 MAX could resume its work no earlier than the summer of 2020. Moreover, this will happen only if permission is obtained from the air regulator, the US Federal Aviation Administration (FAA). In a statement from the agency, the FAA will carefully monitor that all proposed modifications to the Boeing 737 MAX "meet the highest certification standards." The management emphasized that the FAA continues to work with other safety regulators to verify Boeing’s operations.

Recall that the operation of the Boeing 737 MAX was suspended in 2019 after two plane crashes of this aircraft model. In October 2018, the Lion Air Flight 610 crashed in the ocean near Indonesia shortly after takeoff. Killed all 189 people on board, including three children. In March 2019, a flight of 302 Ethiopian Airlines crashed just a few minutes after departure from the Ethiopian capital, killing 157 people. The cause of the disasters was a malfunction in the control system of the stabilizer MCAS. Moreover, the management of the company knew about these shortcomings. Earlier, the concern expressed the hope that the operation of the 737 MAX will resume in February-March 2020, CNBS reports.

The shutdown of the conveyor threatens not only large financial and image losses for the corporation itself. Restarting production and overcoming the crisis, according to analysts, will be an even more difficult burden for Boeing than stopping production. In addition, on Tuesday it became known about the company's plans to seek a loan of 10 billion dollars.

Note that, despite the suspension of aircraft operation, Boeing has since continued to produce its 737 MAX line - an average of 42 cars per month. As a result, currently in the states of Washington and Texas, the corporation has about 400 aircraft waiting to be shipped to airlines around the world. The contracts are structured so that the concern cannot receive money from the sale of aircraft until they are delivered to customers.
Boeing management announced that it was not going to lay off or let go on unpaid leave of workers engaged in the assembly of an airplane in Renton. The company said employees would be reassigned to other positions during the closing of the conveyor.

At the same time, stopping production of the best-selling model of the corporation, in the future, according to experts, could damage US economic growth, given the role that Boeing plays in filling the federal budget. According to experts, the suspension of production of 737 MAX can cost losses only in the first quarter of this year to 0.5 percent of national GDP.

In addition, Boeing is “tied up” by many subsidiaries and companies cooperating with it, which suffer significant financial losses and are forced to cut staff. So, the largest Boeing supplier, Spirit AeroSystems Corporation, which produces the fuselage and other parts for the 737 MAX, has already announced that it will lay off 2,800 employees from production in Kansas. The stoppage of production at the company's plant is likely to last longer than that of Boeing, since since March last year it continued to produce fuselages for the troubled Boeing aircraft. As a result, about 100 ready-made fuselages accumulated at the company's warehouse, awaiting the resumption of production of the 737 MAX. By the way, these planes accounted for about 50 percent of Spirit's business, and the suspension of production led to a decrease in its debt to the status of unnecessary bonds.

According to some reports, at least seven more companies involved in the production of the Boeing 737 MAX have already suffered serious financial losses and were forced to lay off a large part of their employees.
Almost every day it becomes known about new Boeing problems that were not brought to the attention of the aviation regulator and the public. So, on Monday, The New York Times accused the corporation of knowingly hiding the facts about its responsibility for the plane crash in the Netherlands in 2009. Then, as a result of the crash of a Boeing 737 Turkish Airlines plane, nine people were killed while landing at Amsterdam Airport. And recently it became known: a check, which was carried out in June 2019, showed that low-quality parts were installed on 178 Boeing 737 MAX aircraft and 133 Boeing 737 NG models, which could be subject to premature failure and lead to damage to the liners in flight.

Source: Russian newspaper

22.01.2020 12:00:45
(Automatic translation)

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