Boeing cutting back on 737 MAX production this month

Boeing is cutting down on its 737 MAX production in the wake of two high profile crashes involving its model.

The aerospace company will temporarily move the production rate of the 737 MAX from 52 airplanes per month, to 42. The cutback will begin in mid-April.

“They were heading to 57 a month, so throttling back to 42 is a significant move,” said aviation analyst Richard Aboulafia, further commenting that the cutback “seems like a prudent move.”

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Employment levels will remain the same, according to the company. The 737 MAX is built in Renton.

“I think everyone involved in this program is going to feel a bit skittish after these tragedies,” Aboulafia said. “The best case scenario, in my thinking, three months. There are no guarantees in life. But if it is a three month scenario — they slow things up and they try to recover the second half of the year, that should not affect employment.”

“I don’t think it’s all that significant, given everything that has happened, it seems like a tactical move,” he said. “So much depends, however, on how quickly they can implement that fix and get everyone comfortable with it. In and of itself, I don’t think this production cut should be taken as a commentary on the future potential or strategic direction of the program.”

Boeing’s statement

The announcement comes just a day after a preliminary report identified Boeing’s new flight control software as a major factor in the deadly Ethiopian Airlines and Lion Air crashes.

In a statement from Boeing CEO Dennis Muilenburg, he says that work on the 737 MAX’s software continues:

We now know that the recent Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents were caused by a chain of events, with a common chain link being erroneous activation of the aircraft’s MCAS function. We have the responsibility to eliminate this risk, and we know how to do it. As part of this effort, we’re making progress on the 737 MAX software update that will prevent accidents like these from ever happening again. Teams are working tirelessly, advancing and testing the software, conducting non-advocate reviews, and engaging regulators and customers worldwide as we proceed to final certification. I recently had the opportunity to experience the software update performing safely in action during a 737 MAX 7 demo flight. We’re also finalizing new pilot training courses and supplementary educational material for our global MAX customers. This progress is the result of our comprehensive, disciplined approach and taking the time necessary to get it right.

Muilenburg also says that he has asked the company’s board of directors to “establish a committee to review our company-wide policies and processes for the design and development of the airplanes we build. The committee will confirm the effectiveness of our policies and processes for assuring the highest level of safety on the 737-MAX program, as well as our other airplane programs, and recommend improvements to our policies and procedures.”

The committee will include Adm. Edmund P. Giambastiani Jr.; Robert Bradway, chairman and CEO of Amgen, Inc.; Lynn J. Good, chairman, president and CEO of the Duke Energy Corporation; and Edward M. Liddy, former chairman and CEO of the Allstate Corporation. All are members of the Boeing’s board.

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