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How halting production of Boeing’s 737 Max could affect the aviation industry

Earlier this fall, Boeing said it expected its 737 Max jets to fly again in January 2020. But as a Federal Aviation Administration investigation continues and concerns about the plane’s safety persist, the aerospace giant has announced it is pausing its production instead. Miles O’Brien joins Judy Woodruff to discuss effects on the aviation industry and why the FAA itself has come under scrutiny.

Read the Full Transcript

  • Judy Woodruff:

    Just about a month ago, Boeing said that it expected its 737 MAX jets to return to the skies next month. That's clearly not happening.

    And now the aerospace giant and its suppliers are preparing for harder times this winter. Production of the jet will shut down, for now, beginning in January.

    As our aviation correspondent Miles O'Brien tells us, there's concern over those ripple effects and whether the safety concerns are being adequately addressed.

  • Miles O’Brien:

    This is what it looks like at a Boeing airfield in Seattle, dozens of new 737 MAX jets sitting idle. Thousands of others that have been ordered are on indefinite hold, as the aerospace giant is still trying to get clearance from the government to fly those planes again.

    Analysts like Joe Schwieterman say Boeing is feeling more pain.

  • Joe Schwieterman:

    This has shaken the company to its core.

  • Miles O’Brien:

    Today, the biggest MAX customer in the U.S., Southwest Airlines, announced it is canceling thousands of flights until mid-April and will find alternate flights for those passengers affected.

  • Joe Schwieterman:

    The airlines themselves are in just a terrible spot, because they're selling spring break, they're selling summer without knowledge of what their fleet is.

  • Miles O’Brien:

    Since March, all 737 MAX jets have been grounded worldwide following a pair of crashes in Indonesia and Ethiopia that killed 346 people.

    Yesterday's decision came just days after the head of the Federal Aviation Administration testified on Capitol Hill.

  • Stephen Dickson:

    The situation with the 737 MAX is unprecedented in many respects.

  • Miles O’Brien:

    Unlike Boeing's optimistic estimates, he gave no timeline for when the plane would be back in the sky.

  • Stephen Dickson:

    We need to make sure that the public has confidence in that airplane and I'm confident that I would my own family and those Boeing employees would put their own families on the airplane.

  • Miles O’Brien:

    Lawmakers also released a report alleging federal authorities and Boeing knew about problems with an in-flight control system after the first crash happened in Indonesia, and still didn't ground the plane.

    A whistle-blower from Boeing's factory said he tried to sound the alarm.

  • Edward Pierson:

    The 737 factory was in chaos. Every single factory health metric was getting record low marks. And each one was trending in the wrong direction.

  • Miles O’Brien:

    The company says it has no plans to lay off the 12,000 workers at the main 737 MAX plant.

  • Judy Woodruff:

    And Miles joins me now to explore some of the bigger questions for Boeing and for the FAA.

    Hello to you, Miles.

    So we heard in your piece analysts talking about what a risk this represents for Boeing. Boeing is now saying no layoffs. But the 737 MAX is a big piece of their business, isn't it?

  • Miles O’Brien:

    It's a big piece of their business. And it's a pretty big piece of the economy in general, Judy.

    While Boeing has some pretty deep pockets and can keep those employees on the line in anticipation of spooling things back up relatively quickly, when you start looking down the supply chain at some of their vendors who supply them with various widgets, pieces and parts for the aircraft, they don't have the pockets, the deep pockets, to be able to withstand this.

    So look for layoffs sooner in the larger ecosystem, if you will.

  • Judy Woodruff:

    And, Miles, we have — also, we have learned more in the last week or so about what was going on internally at the FAA in the period after the first crash.

    What have we learned about what was happening there?

  • Miles O’Brien:

    After the Indonesian crash, there was an analysis of what the real risks were of this particular system that was at the root cause of that crash.

    And it was determined that the 737 MAX, as it is, could result in a fatal accident every two or three years, which in this day and age is a way unacceptable rate of accident. The FAA made the decision not to ground the aircraft however, although that — a lot of experts would look at that and say that would be good reason to do so, instead said it would give the pilots a thorough briefing about the MCAS system, the system at the root of the problem, and put the airplanes back into service.

    Unfortunately, of course, there was a second crash, and the grounding occurred after that.

  • Judy Woodruff:

    And, Miles, this plays into the larger concerns that have been out there about whether the FAA has, frankly, abdicated too much of the oversight, the certifications to the industry.

  • Miles O’Brien:

    Well, the basic theory, Judy, is that no one in the industry wants an unsafe aircraft. And that is true when you talk to people.

    And the FAA, over the years, however, has reduced the number of boots on the ground in these factories and deferred a lot of the inspection process to the industry itself. This is a way to save money. And the idea is that there's a mutual goal towards safety.

    But when things get competitive, there are a lot of temptations to cut corners. And Boeing was in a very heated competition with Airbus to get this 737 MAX out the door.

  • Judy Woodruff:

    And, finally, Miles, what about the speculation about whether the 737 MAX is ever going to come back?

  • Miles O’Brien:

    Well, yes, there's a lot of speculation on that front, and understandably so.

    I mean, I think, quite frankly, the traveling public has a fairly short memory of these sorts of things. Frankly, the traveling public is looking for the lowest fare when they book a flight.

    The real question, I think, is, has the industry, have the pilots, have — the insurance industry, has it lost faith in the 737 MAX? If that is the case, this is an aircraft that might never fly.

  • Judy Woodruff:

    Miles O'Brien, reporting on today's developments around the 737 MAX and Boeing, thank you, Miles.

  • Miles O’Brien:

    You're welcome, Judy.

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