boeing-suppliers-bracing-for-temporary-halt-in-737-max-output

Boeing suppliers bracing for temporary halt in 737 MAX output

Business

WASHINGTON/PARIS (Reuters) – Boeing suppliers, customers and financiers braced on Monday for a possible freeze in Boeing 737 production for the first time in more than 20 years as the grounding of the best-selling MAX looks set to last well into the New Year.

Two suppliers told Reuters Boeing was likely to halt assembly of the jet for the time being, though some suppliers could be asked to keep producing to minimize disruption.

Boeing’s (BA.N) board was due to meet for a second day in Chicago on Monday to assess output decisions, with an announcement expected later in the day.

A person briefed on the matter said on Sunday Boeing was considering whether to cut or halt production of its grounded 737 MAX after the Federal Aviation Administration said last week it would not approve the plane’s return to service before 2020.

The company has already cut production to 42 jets a month, from 52 a month before regulators ordered a worldwide grounding in March in response to two fatal accidents.

The person briefed on the matter told Reuters a temporary shutdown was more likely than another cut, but it would potentially take a few weeks before production could be halted.

Boeing said late on Sunday the company “will continue to assess production decisions based on the timing and conditions of return to service, which will be based on regulatory approvals and may vary by jurisdiction.”

Reporting by David Shepardson, Tim Hepher. Editing by Jane Merriman