Could Boeing Co.’s latest internal move be an indication of something looming with its troubled 737 MAX aircraft?
The manufacturer said this week it will reassign 3,000 workers to other jobs after halting production of the grounded jet.
In large part, the employee move comes on the heels of Boeing settling deals with individual airlines for the losses carriers have suffered after the MAX was grounded in March of 2019.
The latest was with American Airlines and Aeromexico; terms of the deals were not disclosed but American said it will put aside an additional accrual of $30 million into its employee benefits program.
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Southwest and Turkish airlines have also struck deals with Boeing, which said it does not comment on the agreements.
But the question remains – does re-assigning so many employees signal an end to the 737 MAX?
The Federal Aviation Administration is in the process of re-certifying the plane but has run across numerous problems, the latest coming just days ago when the FAA said a potentially serious wiring issue that could delay the return of the 737 MAX.
Boeing emailed its staff and said about 3,000 employees, mostly in manufacturing, engineering and fabrication, will be reassigned to other tasks. According to Reuters News Service, most of those employees work at Boeing’s Renton, Washington plant where the 737 MAX is manufactured while some are at Boeing’s South Carolina operations.
Boeing says it will not lay off or furlough any workers as a result of the production halt. It did add a storage facility for MAX planes in Victorville, California.
Leading to further speculation that the company could further halt production even if it gets FAA approval to get the MAX back in the sky, its biggest supplier, Spirit AeroSystems Inc., also announced it would offer voluntary layoffs to some employees that produce parts for the beleaguered plane.
With all of the underlying issues beginning to add up – layoffs at Boeing and one of its subsidiaries, the compensation settlements with numerous airlines, the continued delays in recertifying the aircraft, and the hundreds of thousands of canceled flights over the past 9 months – it appears the future of the 737 MAX is very much in doubt. And the apparent reticence of the flying public to get back into the MAX.
