As anticipated, Boeing today confirmed that it is temporarily suspending production of the Boeing 737 MAX at its Renton, Washington facility. In doing so, it is not laying off workers in Renton, but is keeping them on payroll to fine tune its production system. The company may utilize the Renton facility to prepare for returning the grounded aircraft and newly produced aircraft into service. Boeing’s statement can be found here.

With no layoffs at Boeing, the major impact will be felt by the supply chain, which will be forced to stop shipping parts. This will certainly impact Spirit Aerosystems, which builds the 737 fuselage, CFM, which builds the engines, and hundreds of smaller suppliers throughout the country.

It is quite likely that several suppliers that depend on the MAX for the majority of their business will face extreme financial difficulties or fail. In that case, Boeing may need to find and qualify alternate suppliers for some parts on the aircraft, which could lead to further program disruption once production re-starts.

Boeing did the right thing by its employees with no layoffs. But employees of suppliers will unfortunately not share in that good fortune, with layoffs possible during the holiday season.

As the Wall Street Journal indicated earlier today, Boeing’s attempts to pressure regulators for an early return to service may have backfired, leading to this unfortunate circumstance. Boeing has only itself, and the arrogance of its senior leadership, to blame.

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President AirInsight Group LLC

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