There’s more bad news from Boeing today.
The aerospace giant will "temporarily" cut production of its 737 Max jets at its plant in Renton, Washington. The number of the jets will be reduced to 42, 10 fewer than the company was assembling at its plant.
In his statement, Boeing's CEO said as long as the number of 737 Max planes built here stays at 42, there will be no layoffs. But an analyst said this will almost certainly have an impact far beyond this facility.
It is a bombshell, a sign of still more turbulent skies for the aerospace giant.
"The depth of the cut from 52 to 42 a-month is a huge cut in terms of airliner production," said analyst Scott Hamilton.
He says he suspected Boeing's troubled 737 Max might not be back in the air until after the Paris Air Show in late June. But the announcement of production cuts at its Renton plant caught him by surprise.
"I did not expect it that deep," Hamilton said. "I did not expect it that soon. So this tells me that this grounding is going to go on a pretty long time."
Boeing has been buffeted by bad news since an Ethiopian Airlines 737 Max fell from the sky in March.
That, coupled with the Lion Air crash in Indonesia in October 2018, claimed the lives of more than 350 people.
Just yesterday, in an extraordinary online apology to the victims' families, Boeing CEO Dennis Muilenburg conceded that the aircraft's Maneuvering Characteristics Augmentation System was a factor in the crashes. He promised a software patch to fix it.
"It's our responsibility to eliminate this risk," said Muilenburg. "We own it, and we know how to do it."
The company says cutting production to 42 737 Max jets a month should not result in any layoffs at its Renton plant. But other workers who depend on Boeing to be fully operational will likely feel the impact, too.
"For every direct job at Boeing," said Hamilton, "there are about four indirect jobs that are reliant on Boeing."
In a statement, the union representing Boeing machinists stressed that its employees won't be losing their jobs because of this announcement and they "look forward to helping resolve these issues."
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