Boeing said Monday it would temporarily suspend production of its globally grounded 737 max jets next month as safety regulators delay the aircraft’s return to the skies after two crashes.
The decision confirmed investor fears that the company’s recovery from the crisis is dragging on longer and creating more uncertainty for Boeing than executives anticipated.
Boeing’s travails since March have weighed on the US economy, holding down American manufacturing output, trade and sales of durable goods while damaging the company’s performance on wall street’s benchmark dow jones industrial average.
In a statement, the company said it would continue to pay its workers despite the temporary production stoppage, but the decision immediately raised questions for the future of parts suppliers that contribute to the jets’ manufacture.
The company said it would focus on delivering 400 jets it has kept in storage.
Though the jets have been grounded worldwide since march following deadly crashes in Indonesia and Ethiopia, which left 346 people dead, Boeing had continued to produce 40 of the planes per month at a Renton, Washington facility.
Last week, us aviation regulators issued the company an unusually sharp rebuke, accusing it of pursuing an “unrealistic” timeline for the max’s return to service and of making public statements intended to put pressure on federal authorities.
The federal aviation administration said Wednesday it could not approve the jets’ return to service before 2020, even though Boeing had long said it planned to get officials’ green light before the end of this year. Boeing and the faa have been under intense scrutiny for their responses to issues with the aircraft, including the flight-handling system involved in both accidents, the manoeuvring characteristics augmentation system, or mcas.