Boeing restarts production of the still-grounded 737 Max amid coronavirus-caused financial distress

On a day when Boeing announced more than 12,300 jobs cuts in the U.S., with almost 10,000 of those in Washington state, the company also chose to push the button on re-starting 737 Max production.

“Today, teams in Renton started to warm up the factory’s central production line,” said Boeing Commercial Airplanes CEO Stan Deal in a message to employees Wednesday afternoon.

The Max has been grounded since soon after the deadly crash of an Ethiopian Airlines Max in March 2019, following the crash of a Lion Air Max in Indonesia less than five months earlier, with a combined death toll of 346 people.

Boeing’s future business relies upon the rebirth of this troubled airplane, which still has a backlog of more than 3,800 orders.

The 737 in its various models has typically provided about half the revenue of the Commercial Airplanes division. Boeing has no alternative to offer in this size category of workhorse domestic jet and – especially now after the huge financial hit from the pandemic – there’s no question of Boeing being able to pay for the launch of a new plane in its place.

As engineers worked throughout 2019 on a fix for the Max’s flawed flight control system that brought down the two airliners, Boeing continued to build the plane at a lower production rate. But when approval from the Federal Aviation Administration for the jet to fly again was repeatedly pushed out, Boeing finally halted production of the jet in January.

Boeing still is hoping to win FAA clearance for the Max in late summer or early fall and will slowly ramp up from Wednesday’s restart of the assembly line to be ready.

During the production halt, Boeing said it has implemented more than a dozen initiatives to improve the way the 737 Max is built.

These seem aimed not only at making the process more efficient but also at addressing serious quality control issues that have surfaced repeatedly at Boeing in the past two years, including on the Max program. These have included instances of debris and tools left in the innards of finished airplanes.

In February, Boeing found debris in the wing fuel tanks of completed Maxs that had been parked and stored, forcing it to do inspections for Foreign Object Debris (known as FOD in the aviation world) in all 385 planes that had been built but not delivered. It also recommended that the airlines who had taken delivery of the Max jets inspect the wing tanks of their parked aircraft.

Earlier this month, according to a person with knowledge of the incident, a bag of screws was found inside a Max wing tank.

In his message, Deal outlined the changes to the Max assembly process:

A new standard set of tool kits and work processes for each work position in the factory.

New control centers beside the assembly line on the factory floor, where engineers can provide real-time support to mechanics.

A reconfigured factory layout to eliminate unnecessary equipment and provide teams a clear line of sight to the airplane.

“These initiatives will help us reach our goals of zero safety incidents, zero FOD, 100% quality and 100% of each job completed in its position,” Deal wrote in his message.

Deal said the restart of the line heralds “a slow ramp up of production over the remainder of this year.”

Acknowledging the current collapse in demand for new aircraft due to the coronavirus pandemic, he added that Boeing plans to make gradual rate increases next year “consistent with our customers’ recovery to the market.”

Last month, Boeing removed from its backlog more than 200 orders for the Max, half of those outright cancellations and the rest taken out because the commitment was considered no longer solid enough to be counted.

Industry experts anticipate more cancellations as airlines downsize to match the drastic drop in air travel.

However, at least a few airlines say they will want their orders relatively soon. American Airlines has retired its older aircraft and when business picks up again, plans to replace them with new Maxs.

In an interview with Bloomberg News Tuesday, Ryanair CEO Michael O’Leary said he’s betting on the return of the Max to take advantage of any recovery next year as rival European airlines falter.

“That’s very much why we want to go ahead and take delivery of the Max,” O’Leary said. “Clearly there’s going to be a huge drop in traffic in 2020, but we think in 2021, there’ll be a lot of growth opportunities.”