Source says production resumed on the 6th
Order secured for 4,200 units
American aircraft manufacturer Boeing has reportedly resumed production of its 'cash cow' model, the 737 Max. This comes one month after the Boeing union strike ended.
On the 9th (local time), major foreign media outlets cited sources saying, "On the 6th, Boeing restarted the 737 Max production line," adding, "Thanks to the increase in global air travel demand, Boeing has secured orders for about 4,200 units of the 737 Max model." The resumption of production of Boeing's 'bestseller' 737 Max is considered a key factor in overcoming the company's financial difficulties amid massive debt.
Earlier, Boeing faced setbacks in aircraft manufacturing and delivery after a part of the fuselage of the 737 Max 9 passenger plane fell off during flight earlier this year, followed by a production line halt due to a union strike in September. About 33,000 Boeing factory workers in Washington, Oregon, and California, who went on strike demanding wage increases, accepted a 38% pay raise over four years in early last month, ending the strike that lasted about seven weeks.
Although the strike has ended, Boeing's goal to increase 737 Max production to 56 units per month has been hindered by two fatal crashes and supply chain issues arising after the pandemic. Jefferies analysts forecast that Boeing's 737 Max production next year will remain at an average of 29 units per month. Earlier, the U.S. Federal Aviation Administration (FAA) limited Boeing's 737 Max production to 38 units per month in January following the fuselage hole incident.
Amid this corporate crisis, Kelly Otoberg, who took office as CEO in August, has begun laying off 10% of the total workforce as part of cost-cutting measures. Boeing employs about 170,000 people, of whom 17,000 are targeted for layoffs. According to the Associated Press, 400 Boeing employees working in Washington state were laid off on this day, and more than 500 Boeing employees in California were also notified of layoffs.
CEO Otoberg explained that these layoffs are not retaliatory measures related to the union strike but are due to excessive staffing. She also declared, "We are now at the lowest point," and vowed to break down the bloated company management, wasteful spending, and a culture of internal shirking of responsibility.
On this day, Boeing's stock closed at $157.04, up 2% from the previous session on the New York Stock Exchange. However, it has fallen about 37% since the beginning of the year.
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