Boeing will reassign 3,000 workers as airlines reach compensation deals over MAX

By David Shepardson

(Reuters) – Boeing Co <BA.N> said Monday that it will reassign 3,000 workers to other jobs as it halts production of the grounded best-selling 737 MAX jet in mid-January.

The announcement came after American Airlines Group Inc <AAL.O> and Mexico’s Aeromexico <AEROMEX.MX> disclosed they were the latest carriers to reach settlements with Boeing over losses resulting from the grounding of 737 MAX aircraft.

Neither airline disclosed the compensation. A number of airlines have struck confidential settlements with Boeing in recent weeks. Boeing said it does not comment discussions with airlines.

Boeing’s best-selling 737 MAX has been grounded since March, following two fatal crashes in five months that killed 346 people.

In an email to employees, Boeing said about 3,000 employees, mostly in manufacturing, engineering and fabrication, will be reassigned to other tasks. Most of those employees work at Boeing’s Renton, Washington plant where the 737 MAX is manufactured while some are at Boeing’s South Carolina operations.

Some staff will be reassigned to work on the 767 and 777/777X aircraft in Everett, Washington. Boeing has said it does not plan to lay off or furlough any workers as a result of the production halt.

Boeing also said it added a MAX storage facility in Victorville, California. Some employees from Renton will staff MAX airplane storage locations in Moses Lake, Washington and Victorville.

Boeing’s biggest supplier, Spirit AeroSystems Inc <SPR.N>, said Monday it would offer voluntary layoffs to some employees as it grapples with the production halt. The company said last month it would suspend production of 737 MAX parts beginning Jan. 1.

Reuters has reported the Federal Aviation Administration is not expected to approve the plane’s return to service until at least February and potentially March or later.

U.S. airlines will not resume 737 MAX flights until at least early April, they have said.

Boeing and the FAA said Sunday they are reviewing a potentially serious wiring issue that could delay the return of the 737 MAX.

American said the compensation from Boeing will be received over several years, and of the total amount, more than $30 million will be used the airline’s 2019 employee profit-sharing program.

Southwest Airlines Co <LUV.N>, the world’s largest 737 MAX operator, said in December it had reached a confidential agreement with Boeing for a portion of a projected $830 million hit to operating income in 2019.

Boeing shares ended the day up 0.29% at $333.74.

(Reporting by David Shepardson in Washington and Sanjana Shivdas and Shanti S Nair in Bengaluru; Editing by Leslie Adler and Cynthia Osterman)

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