As Boeing suspends 737 Max production as of January 2020, the vast supply chain and service company backing production of the aircraft is preparing for the effects.
Reuters estimates around 680 suppliers form the Boeing 737 Max supply chain, largely based in the US.
Following tragic incidents which resulted in loss of life in October 2018 and in early 2019, Boeing 737 Max flights were grounded. Production in the US had continued with Boeing stock piling the aircraft, however the firm now has 400 planes in storage and Boeing said it was now prioritising delivery of those stored aircraft over production.
The impact of the indefinite suspension will depend on how long it lasts, while reports indicate that one of largest 737 suppliers - Spirit AeroSystems - has already opened negotiations with Boeing.
The manufacturer stressed that no layoffs are expected. It said: "Safely returning the 737 MAX to service is our top priority. We know that the process of approving the 737 MAX's return to service, and of determining appropriate training requirements, must be extraordinarily thorough and robust, to ensure that our regulators, customers, and the flying public have confidence in the 737 MAX updates. As we have previously said, the FAA and global regulatory authorities determine the timeline for certification and return to service. We remain fully committed to supporting this process. It is our duty to ensure that every requirement is fulfilled, and every question from our regulators answered."
"Throughout the grounding of the 737 MAX, Boeing has continued to build new airplanes and there are now approximately 400 airplanes in storage. We have previously stated that we would continually evaluate our production plans should the MAX grounding continue longer than we expected. As a result of this ongoing evaluation, we have decided to prioritize the delivery of stored aircraft and temporarily suspend production on the 737 program beginning next month."
"...As we have throughout the 737 MAX grounding, we will keep our customers, employees, and supply chain top of mind as we continue to assess appropriate actions. This will include efforts to sustain the gains in production system and supply chain quality and health made over the last many months."
In October, the WTO ruled that the US was free to impose new tariffs on certain items in response to a long running dispute over subsidies granted to Boeing and Airbus respectively.
