Boeing to halt work on aircraft assembly lines

Boeing Co said Monday it would suspend production of the 787 airplane at its facilities in South Carolina amid the coronavirus pandemic.

The announcement came soon after the state’s governor issued an order Monday directing residents to stay home except for essential trips.

Production will be suspended until further notice after the second shift on Wednesday.

On Sunday, Boeing announced plans to cease production at its Washington state assembly plants until further notice as part of its effort to halt the spread of the coronavirus.

Last month, Boeing announced a temporary halt to production of twin-aisle jets at plants near Seattle and in central Washington but said it expected to resume production this week. It’s not clear when production will resume.

Through Friday, The Seattle Times reported that 95 Boeing workers tested positive for the coronavirus in Washington state, up from 54 the previous week. Fourteen of the infected workers are assigned to Boeing’s wide-body jet-assembly plant near Seattle.

On Sunday, Boeing said about 135 members of its global workforce of 160,000 had tested positive for COVID-19.

"The health and safety of our employees, their families and our communities is our shared priority," said Stan Deal, Boeing Commercial Airplanes president, in a statement. "We will take this time to continue to assess applicable government direction, the spread of the coronavirus in the community and the reliability of our suppliers to ensure we are ready for a safe and orderly return to operations."

During the temporary shutdown, Boeing said it will increase health and safety measures, including staggered shifts, more frequent cleaning of work and common areas, and "visual cues" to encourage physical distancing.

Boeing this week plans to stop paying about 30,000 production workers in Washington state after it previously extended to 10 days from five the amount of paid leave available after the production suspension. Until production resumes, workers can use vacation and sick leave and will continue to receive medical coverage.

In a related move, Boeing said it would suspend until at least April 20 operations at a plant in Pennsylvania that builds military helicopters.

The temporary shutdowns come as Boeing faces reduced revenue from the grounding of the 737 MAX after two fatal crashes and as customers cancel orders for new planes because demand for air travel has collapsed during the coronavirus pandemic.

In January, Boeing reported a loss of $636 million in 2019 compared with a profit of $10.46 billion in 2018 — its first annual loss in more than 20 years. Boeing suspended dividends in March. The CEO and chairman of the board agreed to forego pay through 2020.

Last month, Boeing said it would seek $60 billion in federal loan guarantees to ease the cash drain due to the outbreak. The company said it wouldn’t give the government an equity stake in the company to secure the loans.

Boeing last week said it would offer voluntary buyouts to its workforce as it struggles to cut expenses amid a worldwide economic slowdown caused by the coronavirus pandemic.

In a statement, Boeing CEO David Calhoun said recovery will take years, and that the types of products and services demanded by customers will be different when the world emerges from the COVID-19 outbreak.

The 737 MAX, Boeing’s best-selling jet, has been grounded worldwide since March 2019 following crashes in Indonesia and Ethiopia that killed a total of 346 passengers and crew.

Boeing’s stock shot up nearly 20 percent Monday to close at $148.77 a share. Its 52-week high is $398.66.

Deliveries of long-range jets like the Boeing 777 or 787 and Airbus A350 or A330 have been hit particularly hard as airlines seek deferrals, and many withhold progress payments.

On Monday, Airbus said it would temporarily halt production at its A220/A320 manufacturing facility in Alabama because of "high inventory levels in the sites and the various government recommendations".

Reuters contributed to this story.