MAX production ‘to restart in May’

SEATTLE: Boeing Co plans to restart 737 MAX production in May, ending a months-long halt triggered by a safety ban on its best-selling jet after fatal crashes, according to people familiar with the matter.

Boeing’s planning hinges on the scale of disruptions from the fast spreading coronavirus, and US regulators clearing the 737 MAX to return to service, a milestone the aerospace giant still expects to reach in mid-2020.

One industry source said Boeing has asked some suppliers to be ready to ship 737 parts in April. Another person said production was planned to restart in May.

A third person said coronavirus was throwing a wrench in Boeing’s plans — they had initially hoped for April, but that fell to May.

“It’ll be a very slow, methodical, systematic approach to warming the line-up, and getting crews back in place,” Boeing chief financial officer Greg Smith told Reuters on Tuesday when asked about the May restart goal.

“Priority No. 1 is getting customers’ fleets back up,” he said, adding that a production ramp up would be paired with clearing the MAX backlog. “We don’t want to add to inventory.”

Boeing ceased production of the jet in January as it struggled to win regulatory approvals and accrued a backlog of 400 undelivered jets.

The coronavirus pandemic has shattered global travel demand, upended lives for millions and wiped billions off Boeing’s market value, compounding a year-old crisis over the grounding of the 737 MAX after crashes in Ethiopia and Indonesia killed 346 people.

Boeing said on Monday that it would halt production in its Washington state facilities to reduce coronavirus risks.

Boeing has reported dozens of cases across its Seattle-area facilities, many of which were at its Everett hub north of Seattle. One worker died from the coronavirus, according to a friend’s Facebook tribute on Monday.

The company has told suppliers to halt shipments to its Seattlearea facilities, and has frozen hiring among other cash-saving measures.

Boeing is seeking $60 billion in US government aid to prop up its finances and the embattled American aerospace supply chain.

It has used the production lull to curb inefficiencies, improve quality and ease the plane’s re-entry to the market.

Fitch Ratings on Tuesday cut Boeing’s credit rating to “BBB”, with a negative outlook, citing a rapid escalation of the coronavirus pandemic and its impact on the planemaker’s markets and operations.

The agency said it has downgraded long-term ratings for Boeing Co and Boeing Capital Corp to ‘BBB’ from ‘A-.’

Fitch added that its negative outlook was driven by the risk of a more extended coronavirus pandemic.