Boeing Resumes 737 MAX Production After Announcing Over 12,000 Job Cuts

TOPLINE

Boeing announced Wednesday it’s resuming production of its 737 MAX aircraft, just hours after the company announced over 12,000 job cuts—most of those in the Seattle area—as the beleaguered air manufacturer deals with the fallout of the coronavirus pandemic that’s at times seen air travel drop over 90% compared to 2019.

KEY FACTS

KEY BACKGROUND

Boeing had been on a downward trajectory even before the coronavirus pandemic after two of its 737 MAX aircraft were involved in deadly crashes, leading President Donald Trump ground the 737 MAX jets in March of 2019. The company’s share price has taken a tumble since the jet crashes, dropping from trading above $400 in March of 2019 to around $95 on March 20 of this year.

Calhoun said the company plans to recertify its 737 MAX aircraft, with modified flight control systems, and get them back into service at some point later this year.

Boeing is not alone in making deep cuts as the entire airline industry grapples with lost revenue. United Airlines, for example, has said it plans to cut 30% of its management positions.

CRITICAL QUOTE

“We have come to the unfortunate moment of having to start involuntary layoffs,” Calhoun said to employees, adding “I wish there were some other way.”

WHAT WE DON’T KNOW

It’s not clear when the company plans to make another round of cuts, and what areas might be impacted.

FURTHER READING

Boeing slashes 12,000 jobs as virus seizes travel industry (Associated Press)

Boeing to cut nearly 10,000 jobs in Washington, more than 12,000 overall (The Seattle Times)