Yahoo Finance Boeing Restarts Manufacturing Of 737 Max Planes
Boeing Co. (NYSE: BA) has restarted manufacturing its 737 Max commercial airplanes after halting production in January.
What Happened
Prohibited from flying since March 2019 after two fatal crashes that killed 346 people, the resumption of manufacturing marks a milestone for the aerospace company, according to CNBC.
The recertification of the planes has been delayed several times as new issues, such as software glitches, emerged.
Boeing has not confirmed whether the Federal Aviation Administration is near certifying the planes as safe, according to CNBC.
FAA said in a statement, “Work on the project continues, as does our steadfast refusal to speculate on a timeframe for completing it.”
Why It Matters
Once Boeing receives the all-clear from the FAA, it plans to ramp up the production of 737 Max planes to 31 per month during 2021.
In 2019, the airframer had kept production at 48 units per month, now sitting on airfields as they could not be delivered to customers. The sluggish demand for 737s has increased production costs by $1 billion.
Boeing is now cutting costs as it delivered 0 planes in April, and 108 MAX orders were canceled. The company also plans to lay off 2,500 employees beginning Friday.
CEO David Calhoun said workforce reductions up to 15% are required in operations related to Boeing's commercial aircraft customers.
Boeing Price Action
Boeing shares traded 4.84% higher at $156.75 in the after-hours session on Wednesday. The shares had closed the regular session 3.37% higher at $149.52.
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