With 737 MAX set to return to skies, Boeing will rebound again
Don C. Brunell
| December 3, 2020 1:00 AM
Finally, the Federal Aviation Administration (FAA) cleared Boeing’s revamped 737 MAX to return to service, and Seattle Times aviation writer, Dominic Gates, reports its first flight is scheduled for Dec. 29.
The FAA, which had been critical of Boeing, expects other foreign aviation authorities to lift the grounding by early 2021.
That’s not only good news for Boeing, but its workers and suppliers, especially those in Washington. Our state has been the hub of the company’s airplane production since Bill Boeing launched his first seaplane on Lake Union in 1916. Today, Boeing has mammoth manufacturing facilities in the Puget Sound region, which are unlike any other in the world.
Even though Boeing is expected to end 2021 with 30,000 fewer people worldwide, the preponderance of its commercial assemblies remain in Washington, where its employment may drop by more than 10 percent.
Going into 2019, Boeing’s order book was bursting at the seams. Production of 737s was expected to climb from 48 to 60 a month by September. But then came fatal crashes in Indonesia and Ethiopia in which 346 people perished. The MAX was grounded until flaws in its flight control system were fixed.
U.S. carriers American, Southwest and United, which integrated the MAX into their normal routes, scrambled to find replacements. If that wasn’t enough, the global coronavirus pandemic forced airlines to temporarily mothball huge numbers in their fleets.
The net result is the 737 production line at Renton slowed to a crawl. The customers who had clamored for the fuel-efficient MAX stopped taking deliveries and some canceled orders. Today, Boeing has 450 new aircraft parked and ready for delivery, and 60 have no buyers.
The big question is “will people fly in it?”
FAA Administrator Steve Dickson told Gates in a Seattle Times interview, the MAX is “the most heavily scrutinized transportation aircraft in aviation history. I can tell you my family and your family will be safe on this aircraft.” The Air Line Pilots Association, the largest pilot’s union, agrees.
While Boeing’s commercial side has struggled, the company’s defense and space contracts remain strong, which is good news.
CNBC reported while second quarter commercial aircraft sales plummeted by more than 65 percent or $1.6 billion, defense and space posted $6.5 billion earnings. That stability is important to our state because the new state-of-the art refueling aircraft and submarine hunter are assembled here.
Boeing’s success is key to our state and nation’s economic recovery. It’s America’s biggest exporter and the U.S. Defense Department’s second largest contractor. Boeing invests $3 billion in research and development, which is the leader among aerospace and defense companies and holds more than 7,400 active patents registered around the world.
In Washington, at its peak in 2018, Boeing had a network of 1,500 suppliers and purchased $5 billion for those vendors. Boeing continues to be generous in Washington with $44.4 million (2018) in contributions. It invests in advanced worker training programs to assist veterans transitioning from active duty.
Historically, Boeing weathered severe downturns and clawed its way back inventing cutting-edge products. For example, in 1998, the company had a production crisis and there was a large layoff. The downturn was worsened following the terrorist attacks on Sept. 11, 2001. People were suddenly afraid to fly.
The airlines endured the travel slump, and Boeing responded by developing the state-of-the art 787. It is the fuel-efficient twin-aisle jet made of carbon composites. Today, there are 1,000 787s in air carriers fleets.
Boeing will rebound again, and it will continue to innovate and create new products. We will all be the better for it ... and that is very good news.
Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and lives in Vancouver. He can be contacted at theBrunells@msn.com.