Boeing to Cut 737 Rate as Grounding Takes Still Heavier Toll

 - April 5, 2019, 4:44 PM
The production rate at Boeing's 737 line in Renton, Washington, will slow considerably in coming weeks, from 52 to 42 per month. (Photo: Boeing)

Boeing has decided to lower its 737 production rate from 52 to 42 airplanes per month starting in mid-April as a global grounding prevents the company from delivering its 737 Max jets from its narrowbody factory in Renton, Washington. In a statement issued on Friday, Boeing CEO Dennis Muilenburg said the move would allow the company to “prioritize additional resources” toward software certification in an effort to return the Max to service.

Muilenburg added that the rate reduction would not result in any cut in employment and that Boeing would coordinate closely with customers and suppliers to mitigate operational disruption and financial consequences.

Still, the Max’s grounding appears likely to continue for at least several more weeks, meaning the company will need to find parking for dozens or perhaps hundreds of airplanes beyond the space available outside its Renton factory and two airports in the Seattle area, namely Paine Field, some 25 miles north of Seattle, and at Boeing Field, just south of the city.

Until Friday plans officially called for 737 production rates to reach 57 a month by the middle of the year.

Separately, the Boeing chief executive has asked the company’s board of directors to establish a committee to review policies and processes for the design and development of the airplanes that it builds. “The committee will confirm the effectiveness of our policies and processes for assuring the highest level of safety on the 737 Max program, as well as our other airplane programs, and recommend improvements to our policies and procedures,” said Muilenburg.

Former vice chairman of the U.S. Joint Chiefs of Staff Edmund Giambastiani has agreed to chair the committee, which will also consist of Amgen chairman and CEO Robert Bradway, Duke Energy chairman and CEO Lynn Good, and former Allstate chairman and CEO Edward Liddy. All serve on Boeing’s board of directors.

“These individuals have been selected to serve on this committee because of their collective and extensive experiences that include leadership roles in corporate, regulated industries and government entities where safety and the safety of lives is paramount,” said Muilenburg. “Safety is our responsibility, and we own it.”