NEW YORK, April 6, 2019 (BSS/AFP) – Boeing announced Friday it would cut
the production schedule of its 737 aircraft line following the two recent
crashes that have seen the 737 MAX grounded worldwide.
The aerospace giant plans to trim production to 42 planes per month, down
from 52 per month, starting in mid-April. Boeing shares tumbled after the
disclosure, which was released just after the closing bell on Wall Street.
Boeing also announced it was establishing an advisory panel to review its
company-wide policies for designing and developing planes.
The Federal Aviation Administration earlier this week said more work was
needed before the aerospace giant could even submit a proposed fix that is
believed to be a factor in the disasters.
Chief Executive Dennis Muilenburg described the production cut as temporary
and said it would not affect current employment levels for the 737 and
related programs.
“We are coordinating closely with our customers as we work through plans to
mitigate the impact of this adjustment,” Muilenburg said in a statement.
“We will also work directly with our suppliers on their production plans to
minimize operational disruption and financial impact of the production rate
change.”
Boeing has continued to manufacture 737s since the March 10 Ethiopian
Airlines crash killed 157 people, the second deadly crash in five months
after an October 2018 Lion Air crash killed 189 people.
However, Boeing has been unable to make deliveries of the planes to
customers, a key stoppage that will dent revenues. Boeing is scheduled to
report first-quarter results on April 24.
On Thursday, an initial report by the Ethiopia Transport Ministry found
that the crew of the doomed plane repeatedly followed procedures recommended
by Boeing, confirming concerns about the flight control system on the plane.
Scrutiny has centered on the plane’s anti-stall system, Maneuvering
Characteristics Augmentation System, which is believed to be at least partly
at fault.
The Washington Post on Thursday that US regulators had ordered Boeing to
fix a second flight-control problem, not related to MCAS, but which officials
nevertheless deemed critical to flight safety.
The head of the FAA faced tough questioning from a Senate panel last month.
Top Boeing officials are expected at a follow-up hearing that could also be
contentious.
Boeing said the new advisory panel will be led by retired US Navy Admiral
Edmund Giambastiani, former vice chairman of the US Joint Chiefs of Staff.
“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,” Muilenburg said.
“Safety is our responsibility and we own it.”
Shares of Boeing fell 2.3 percent to $382.92 in after-hours trading.