Boeing on Wednesday reported its largest-ever quarterly loss of $3.4 billion due to the continued troubles with its 737 Max plane.The company continues to work with regulators, but if not able to get approval in the near term, Boeing said it would consider reducing or shutting down production of the 737 Max entirely.
The company is still producing 42 of its 737 jets a month and plans to boost that rate to 57 next year. “Should our estimate of the anticipated return to service change, we might need to consider possible further rate reductions or other options, including a temporary shutdown of the Max production,” Boeing Chief Executive Dennis Muilenburg told investors on the company’s earnings conference call.
Boeing’s entire fleet of Max planes has been grounded since March after issues with the model were linked to two crashes.
According to Bloomberg, the 737 Max had an order book initially valued at some $600 billion, which was expected to be the future of the company. The company now expects the cost of manufacturing the 737 Max to rise by $2.7 billion due to production slowdowns. In addition, a $100 million fund is being established to compensate the families and communities affected by the crashes. As Boeing is the largest American manufacturing exporter and one of the nation’s biggest private employers, its troubles will weigh on the U.S. economy, and its extensive supply chain, just as the United States is experiencing an overall slowdown in global manufacturing.
Shares of Boeing were off 4% on Thursday to $346.33.