Boeing has decided to halt production of its 737 Max Jet in January, the company announced on Monday.
Two 737 Max planes crashed within five months of each other, one in Indonesia in 2017 and another in Ethiopia in 2018, killing a total of 346 people. The planes have been grounded worldwide since the incidents, which were blamed on faulty software.
The decision to halt production could have far-reaching ramifications for the U.S. economy. Boeing is the country’s largest manufacturing exporter, and the 737 Max alone is produced at a plant that employs 12,000 people, with thousands more jobs affected as part of the supply chain for the jet.
“It’s not catastrophic, but we don’t need anything more corrosive in manufacturing right now,” chief economist at Grant Thornton LLP Diane Swonk told the Wall Street Journal. “It erodes our ability to grow because it’s such a big-ticket item.”
Boeing has sold around 5,000 of the jets, making it the best-selling airplane in history. It has built about 400 jets that have not been delivered.
Workers at the factory that produces the 737 Max will be reassigned to other jobs, Boeing said.
“Our objective continues to be ensuring supply chain health and production system stability, including the preparedness for seamless transition in the future,” said Gordon Johndroe, a spokesman for the company.
Boeing had been attempting to win approval from the Federal Aviation Administration to let the plane fly again. However, the F.A.A. has pushed back against the company’s efforts.
“Boeing continues to pursue a return-to-service schedule that is not realistic,” an F.A.A. official wrote in an email to Congress last week amid hearings on the safety of the 737 Max.