Boeing stated Monday it would halt production of its best-selling 737 MAX jetliner in January next year. Its largest assembly-line halt in over two decades, as a result of two crashes of the now-grounded plane.
Boeing, which manufactures the 737 south of Seattle, stated it would not lay off any of the nearly 12,000 employees there across the manufacturing freeze, although the move might have repercussions across its international supply chain and the U.S. economy.
The decision at a two-day managerial meeting came after the Federal Aviation Administration (FAA) declined to approve the jet’s return to service before 2020 and delivered what was seen as a public rebuke to Boeing’s hopes of moving faster.
The 737 MAX has been grounded since March after two accidents in Indonesia, and Ethiopia killed 346 people within five months, costing the plane manufacturer over $9 billion thus far.
The decision to stop manufacturing will have an immediate impact on airlines that have already seen delays in deliveries, forcing many to cancel flights or lease older replacements.
But it underscores a worsening of a crisis that has already seen Boeing’s fastest-selling jet grounded across the world, its safety record scrutinized, customers, pressing for damages and its base relationship with the FAA placed under pressure.
Until now, Boeing has continued to manufacture 737 MAX jets at a rate of 42 per 30 days and purchase components from suppliers at a rate of as much as 52 units monthly, although deliveries are frozen until regulators approve the plane to fly commercially again.
Boeing didn’t say how long the shutdown may last, stressing this was up to the FAA.