Boeing supplier employees anxious as company halts 737 Max production

Reuters Seattle, Washington, United States of America Dec 19, 2019, 09.39 AM(IST) Dec 19, 2019, 11.04 AM(IST)

File Photo: A number of grounded Southwest Airlines Boeing 737 MAX 8 aircraft are shown parked at Victorville Airport in Victorville, California, US. Photograph:( Reuters )

Story highlights

Boeing 737MAX 8 jets stands idle at the company's delivery centre, just south of Seattle. It's one of an estimated four hundred 737MAX's stored in Seattle, many in a Boeing employee parking lot, as well as at airfields across the country.

Boeing had hoped that the Federal Aviation Administration would re-certify the aircraft, grounded after two deadly crashes, by the end of the year. With a heavy order book, they kept producing the plane, albeit at a lower rate than before.

But when it became clear that re-certification and the lifting of the grounding order could still be months away, Boeing announced they would stop production sometime in January, with 12,000 workers employed producing the aircraft being re-deployed to other Boeing manufacturing plants.

The news that no employees will be laid off when the production lines stops in January was welcomed by Jon Holden, President of the trade union representing factory floor workers.

"I think it was the right decision Boeing made, to maintain our workforce during this temporary production stoppage. The reality is that it's important to maintain our workforce so that when the grounding is lifted, we're able to ramp up production, build a safe aircraft, meet the needs of the customers with the 737MAX going forward," Holden said on Wednesday (December 18).

For workers on the 737MAX production line at the Boeing Renton plant, the news came as a relief just before the Christmas holiday, but aviation analyst Scott Hamilton says the announcement of no lay-offs came with a caveat.

"Well, there's obviously still uncertainty because what Boeing said was they aren't going to furlough, quote, "at this time", unquote. So how long does that mean?" said Hamilton, adding "Obviously, Boeing maintaining the employee payroll at this point, before the holiday, is a real relief and committing to pay the bonuses that were earned, is a real relief to the employees but what does the end of "at this time" look like? We just don't know."

For the many small aerospace component manufacturers who supply parts for the 737MAX, the immediate future is less certain. Its been reported that Boeing has not contacted them as yet, with details of the production stoppage.

WATCH: Gravitas: The Downfall Of Boeing

 

Thousands of other jobs are dependent upon Boeing 737MAX contracts, as Scott Hamilton describes, "You have a supply chain outside Boeing that is going to be affected. We're still trying to understand what that effect is going to be. There haven't been any public announcement by Boeing. There have been some stories reported that they're going to try to keep some suppliers whole, if you will, or at least sustainable. Other suppliers, we just don't know."

And it won't just be manufacturing that might be affected if the production shutdown lasts very long, or if jobs in the component sector are furloughed. The local economy is heavily reliant upon wages paid by Boeing and its parts' suppliers.

For now Boeing's workers are still clocking in at the Renton plant, but their union representative says the nine months since the 737MAX was grounded has been hard on them.

"Our members care deeply about the work they perform, and they perform it in a fashion to build a safe aircraft. They are proud of the work they do. They are proud of the aircraft that they build, and it certainly has caused a lot of anxiety over these last several months," said Holden.

As 737MAX's await re-certification and delivery to the airlines that ordered them, Scott Hamilton believes that the impact of the production shutdown could be felt much more widely than just in the Seattle region if it goes on beyond a few weeks.

"I think you're looking at two to three months, would be my forecast. If it goes on to six months, boy, you're going to see employees furloughed without pay. You're going to see a ripple effect down through the supply chain. You're going to see a ripple effect through the US economy."

For now these multi-million dollar aircraft stand idle, mothballed in a parking lot while their fate is being decided by aviation regulators in the United States and around the world.

Read in App