Boeing cuts 737 production rate by 10 planes a month

Boeing CEO Dennis Muilenburg (centre, in a file photo) described the production cut as temporary..
Boeing CEO Dennis Muilenburg (centre, in a file photo) described the production cut as temporary..PHOTO: AFP

NEW YORK (AFP) - Boeing announced on Friday (April 5) it would cut the production schedule of its 737 aircraft line following the two recent crashes that have seen the 737 Max grounded worldwide.

The aerospace giant plans to trim production to 42 planes a month, down from 52 a month, starting in mid-April. Boeing shares fell after the disclosure, which was released just after the closing bell.

Boeing also announced it was establishing an advisory panel to review its company-wide policies for designing and developing planes.

Chief executive Dennis Muilenburg described the production cut as temporary and said it would not affect current employment levels for the 737 and related programmes.

"We are coordinating closely with our customers as we work through plans to mitigate the impact of this adjustment," Muilenburg said in a statement.

"We will also work directly with our suppliers on their production plans to minimize operational disruption and financial impact of the production rate change."

Boeing has continued to manufacture 737s since the March 10 Ethiopian Airlines crash killed 157 people, the second deadly crash in five months.


However, Boeing has been unable to make deliveries of the planes to customers, a key stoppage that will dent revenues. Boeing is scheduled to report first-quarter results on April 24.

The new advisory panel will be led by retired US Navy Admiral Edmund Giambastiani, former vice chairman of the US Joint Chiefs of Staff.

"The committee will confirm the effectiveness of our policies and processes for assuring the highest level of safety on the 737-Max programme, as well as our other aeroplane programmes, and recommend improvements to our policies and procedures," Muilenburg said.

"Safety is our responsibility and we own it."

Shares of Boeing fell 1.6 per cent to US$385.70 in after-hours trading.