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caption: Boeing 737 Max jets are grounded at Sky Harbor International Airport in Phoenix on March 14.
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Boeing 737 Max jets are grounded at Sky Harbor International Airport in Phoenix on March 14.
Credit: AP Photo/Matt York

Boeing may shut down Max production line in Renton

If the 737 Max is not back in service by the end of the year, Boeing may reduce or even temporarily stop production of the plane, CEO Dennis Muilenburg told investors in an early morning call.

An extended grounding now raises the specter of layoffs at Boeing's Renton production plant, which only makes 737s. Several other versions of the 737 are also being made in Renton, but the vast majority of the jets in production there are Maxs.

Boeing is Renton's biggest employer.

Boeing earlier reduced production to 42 a month from 52 a month, though it said it planned to increase production after the grounding ended.

Boeing announced a loss of $2.94 billion in the second quarter ending in June compared with a profit of $2.2 billion a year earlier. The company also showed negative cash flow during the quarter.

The Max, Boeing's latest version of the best-selling 737, has been grounded worldwide since March after two fatal crashes. This has affected both sales and deliveries.

Muilenburg told financial analysts and reporters that the company was weighing whether it would be better to stop the flow of planes from the Renton factory if the grounding continued. The planes are parked at several airfields including Boeing Field in south Seattle.

He said it could be disruptive to suppliers and workers to reduce the production rate again.And he acknowledged that there would also be a price to pay for a production line shutdown.

"We place incredible value on our teammates there and the incredible work that they do," Muilenburg said.

"We are working every dimension that we can to preserve that workforce and maintain that learning for future production system ramp-up. So all these things are factoring into our decision process."

Muilenburg said Boeing would submit its proposed fix for the Max to the Federal Aviation Administration in September. He also said the even if that fix was approved in October, it would possibly take several more weeks for aviation authorities around the world to also end the grounding.