Boeing’s New CEO Takes Over Amid 737 Max Fallout
Boeing Co.’s new chief executive said he anticipates resuming production of its grounded 737 Max jet within a few months even as it awaits final clearance from regulators.
The company notified customers Tuesday that it expects the jet won’t be cleared for service until the middle of this year, later than previous projections. Boeing suspended production this month on the jet.
“It’s just a reality-based prognosis. I’m not trying to be conservative here,” Dave Calhoun, a longtime director who assumed the CEO role last week, told reporters on a conference call Wednesday. “I’m simply trying to put a reality-based set of numbers out there. You can attach this schedule to me.”
Boeing’s willingness to restart production before the Max is cleared to fly suggests the company is increasingly comfortable with the remaining hurdles. The plane, Boeing’s top-selling model and a workhorse of the global fleet, has been grounded since March after a pair of crashes killed 346 people.
The Chicago-based company has stumbled repeatedly as it has sought regulatory approval for the Max. Calhoun’s comments offer a rare measure of relief to weary investors, customers and suppliers.
He said production will be “reinvigorated” before June and restarting the supply chain will begin even earlier.
“We’re going to slowly, steadily bring our production rate up a few months before the date, the middle of the year,” Calhoun said.
Boeing shares were down 2.1 per cent to US$307 a share at 2:13 p.m. in New York after falling as much as 3.4 per cent.
He rejected as “sort of silly” suggestions that the company re-brand the plane something other than the Max.
The U.S. planemaker is resetting expectations as it addresses recent developments for the embattled Max: the planemaker’s decision to recommend simulator training for pilots, a software flaw that will require more work than expected and an audit that found some wiring on the plane needs to be shifted.
Calhoun said that the latest estimates delaying the return to service were mostly due to the company’s recommendation for more rigorous pilot training.
The final determination on when the Max will fly again remains in the hands of U.S. regulators, Boeing said in a statement Tuesday.
Every month the grounding drags on means a slower recovery for Boeing, which has halted production of the Max. More delays also signify growing costs to store about 800 of the single-aisle planes.
Boeing has borrowed US$21.5 billion since the first Max fell from the sky in October 2018, and is seeking to add another US$10 billion in new loans.