CHICAGO - Boeing Co. said Monday that it will temporarily stop producing its grounded 737 Max jet starting in January as it struggles to get approval from regulators to put the plane back in the air.
The Chicago-based company said production would halt at its plant with 12,000 employees in Renton, Washington, near Seattle.
Boeing said it doesn't expect any layoffs as a result of the production halt "at this time." But layoffs could ripple through some of the 900 companies that supply parts for the plane.
The Max is Boeing’s most important jet, but it has been grounded since March after crashes in Indonesia and Ethiopia that killed total of 346 people, and federal regulators told the company last week that it had unrealistic expectations for getting the plane back into service.
In a statement, Boeing said it will determine later when production can resume.
“We believe this decision is least disruptive to maintaining long-term production system and supply chain health,” the statement said.
The company said that employees who build the Max will keep working on the 737 or could be assigned to other teams in the Seattle area. Some could be assigned to work on preparing the 400 Max jets that are now in storage to be delivered whenever the FAA and other regulators give it clearance to return to the skies.
Some analysts fear that a total production halt will cut cash flow to companies that make parts for the Max. Without getting specific, Boeing’s statement said it will keep customers, employees and the supply chain at “top of mind as we continue to assess appropriate actions.
Boeing said it will provide financial information on the production halt when it releases fourth-quarter earnings in late January.
The company's stock came under pressure Monday after the Wall Street Journal reported on the possibility of a Max production halt. It closed Monday down $14.67, or 4.3%, at $327.