Spirit To Suspend 737 Max Fuselage Production

 - December 20, 2019, 12:08 PM
Unfinished Boeing 737 Max jets remain parked at the company's narrowbody plant in Renton, Washington. (Photo: Barry Ambrose)

Spirit Aerosystems has decided to suspend all 737 Max fuselage production on January 1 following a Thursday directive by Boeing to the Wichita-based supplier to temporarily halt deliveries on that day. In a statement released Friday morning, Spirit said it would continue to communicate with Boeing regarding the timetable for resuming production and deliveries to the final assembly plant in Renton, Washington.

Because revenue from 737 aircraft components accounts for more than 50 percent of Spirit's annual revenue, the suspension will adversely affect Spirit's business, financial condition, results of operations, and cash flows, noted the company. Spirit, which builds some 70 percent of the Max’s fuselage, did not indicate how the move would affect its 13,000 employees, however.

Spirit added that it is evaluating all potential actions to align its cost base with lower production levels expected next year. “Decisions will be guided by a focus on what is best for the long-term interests of Spirit's stockholders and other stakeholders, including employees,” said the company.

Until Friday 737 Max suppliers largely had remained largely quiet about the expected effects of Boeing’s planned January suspension of the 737 Max.

Boeing called the decision to suspend production the “least disruptive” option to maintaining long-term production systems and supply chain health. The airframe maker said the pause would not result in any layoffs at its narrowbody plant in Renton, Washington and that it would reassign employees to other sites in the Puget Sound region. “As we have throughout the 737 Max grounding, we will keep our customers, employees, and supply chain top of mind as we continue to assess appropriate actions,” said Boeing in a statement. “This will include efforts to sustain the gains in production system and supply chain quality and health made over the last many months.”