Boeing shares tumble on report of 737 Max production cuts

Boeing shares tumble on report of 737 Max production cuts

SpiceJet did not respond to emailed queries on the expected impact of Boeing's reported curtailment or suspension of production of the 737 Max aircraft.

The best-selling Boeing plane has been grounded since March after two fatal crashes in Indonesia and Ethiopia killed 346 people, costing the plane manufacturer more than $9 billion in charges so far.

Boeing shares fell as much as 2.8% in premarket trading in NY on Monday, adding to a 19% drop since a March crash in Ethiopia sparked a global grounding of the 737 Max. "When I mentioned that I've seen operations in the military shut down for lesser safety concerns, I will never forget his response, which was 'The military isn't a profit-making organization'".

Boeing facilities in Washington are likely to temporarily shut down production of the 737 Max aircraft while it remains grounded around the world.

Any MAX production changes could carry significant implications for the USA economy.

"During this time, it is our plan that affected employees will continue 737-related work, or be temporarily assigned to other teams in Puget Sound", Boeing said in a statement.

To date, the aerospace giant had already incurred in a roughly $9.2bn hit linked to the grounding of the MAX. Perhaps, the issue halting the production of 737 Max is one of the things they will be talking about.

Boeing's shares fell 4% in premarket trading to $328.13, while Spirit AeroSystems Holdings Inc fell 3.4%. Regulators also have to inspect each aircraft, adding to the delay. Boeing's hopes of when it might return to service have been repeatedly pushed back as the US Federal Aviation Administration and regulators from Europe to China raise fresh questions about its proposed fixes. The factory shutdown will also ripple through a supplier base that stretches from the Seattle area to Kansas, adding a headwind for USA industry ahead of the 2020 elections.

Defending the agency's decision making, FAA Administrator Stephen Dickson said "any indication that any level of accidents are acceptable is not reflective of the 45,000 dedicated professionals at the FAA".

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