American aviation giant Boeing Co. has announced that the company is preparing to temporarily halt the production of its internationally grounded 737 Max jet from January next year, and it continues to struggle to gain the approval from regulators to restart the plane’s operations in the air.
The company, which is based in Chicago stated that production would be stopped at its Renton, Washington plant which employs 12,000 employees near Seattle. However, the company has also stated that it was not looking to axe any jobs at present.
The decision by Boeing is indicative of an acknowledgment that it will take the company a lot longer to win back the approval of the United States Federal Aviation Administration and other regulatory bodies around the world to allow the 737 Max to fly again.
Halt to Hamper National Economic Output
The 737 Max has been widely thought to be the most important jet for Boeing. However, all planes of this model around the world have been grounded since March 2019, following crashes in Indonesia and Ethiopia, which killed a total of 346 people. Last week, the FAA had informed the company that Boeing had unrealistic expectations on the timeline to bring the plane back into service.
Boeing has already missed out on numerous estimates in terms of setting a return date for the plane. Even if the company does not lay off any employees, halting the production of the plane is expected to impact the national economic output, which can be attributed to the large presence of Boeing in the United States’ manufacturing sector.
In the month of October, the factory output from the aerospace industry of the U.S. has slumped by 17 per cent in comparison to the same period in 2018, accounting for around USD 106 billion. The shutdown is also expected to hurt the massive network of 900 companies which produce engines, fuselage and other parts of the 737, which makes layoffs more likely.
A statement by Boeing states that the company will determine a time when production will resume, a decision, which will largely depend on approval from government regulators on a global scale.