The Max is Boeing’s most important jet, but it
has been grounded since March after crashes
in Indonesia and Ethiopia that killed total of
346 people. The FAA told the company last
week that it had unrealistic expectations for
getting the plane back into service. Boeing
has missed several estimates of a return
date for the plane, and the company didn’t
give a date.
Even if no employees are laid off, ceasing
production still will cut into the nation’s
economic output because of Boeing’s huge
footprint in the nation’s manufacturing
sector. Through October of this year, the U.S.
aerospace industry’s factory output has fallen
17% compared with the same period last year,
to $106.4 billion, in part due to previous 737
Max production cuts.
The shutdown also is likely to ripple through
Boeing’s vast network of 900 companies that
make engines, bodies and other parts for the
737, and layoffs are likely.
Richard Aboulafia, an aircraft industry
analyst at the Teal Group, said the shutdown
would probably hinder the economy in
the coming months and could worsen the
nation’s trade balance.
“This is the country’s biggest single
manufactured export product,” Aboulafia said.
In a statement, Boeing said it will determine later
when production can resume, based largely on
approval from government regulators.
“We believe this decision is least disruptive to
maintaining long-term production system and
supply chain health,” the statement said.