Boeing CEO says company won't scrap 737 Max

Boeing chief executive Dave Calhoun tells reporters the U.S. planemaker expects to resume 737 Max production months before its forecasted mid-year return to service, adding it doesn't plan to suspend or cut its dividend.

Chief executive Dave Calhoun expects production to resume before return to service

Airplane fuselages bound for Boeing's 737 Max production facility sit in storage with their top supplier, Spirit AeroSystems Holdings Inc., in Wichita, Kan, on Dec. 17. Boeing's CEO says the company expects production of the plane will begin months ahead of the planned return to service in June or July. (Nick Oxford/Reuters)

Boeing chief executive Dave Calhoun told reporters Wednesday the U.S. planemaker expects to resume 737 Max production months before its forecasted mid-year return to service, adding that it did not plan to suspend or cut its dividend.

The company announced a production halt in December, when the global grounding of the fast-selling 737 Max following two deadly crashes in five months looked set to last into mid-2020.

Calhoun said the company isn't considering scrapping the Max and expects it will continue to fly for a generation. He also said it won't launch a marketing campaign to get customers to get back on 737 Max planes.

He disclosed that Boeing is starting with a "clean sheet of paper" on a new midsize airplane but it is not clear if the company is scrapping the existing design.

The company said on Tuesday it now expects regulators to approve the plane's return to service in the middle of the year. Calhoun said he did not see recent issues raised about wiring or software as "serious problems."

Boeing shares fell about 1.4 per cent on Wednesday, rebounding from earlier lows during the day.

David Calhoun, centre, then CEO of Nielsen Company, is seen on the trading floor of the New York Stock Exchange Jan. 26, 2011. Now the new chief executive at Boeing, Calhoun said repeatedly revising the return-to-service date for the 737 Max made it 'hard for anybody to trust us.' (Richard Drew/The Associated Press)

Calhoun said Boeing isn't planning to cut or suspend its dividend, because the company has the "financial capacity and capability to do the things we need to do." The CEO said he "will stay on that path unless something dramatic changes."

Calhoun declined to provide a specific date for resumption of production, but said it "will be reinvigorated months before that moment in June, because we have to get that line started up again." He also said the company would make some changes to the 737 Max production line to make it more efficient.

No layoffs planned

Calhoun said the company "will slowly, steadily bring our production rate up a few months before that date in the middle of the year." He said the company was not planning to lay off any employees because of the latest delay in the Max.

The latest push back in the forecasted return to service is due to the company's decision to endorse simulator training for pilots before they resume flights, he said. "We can get this thing back on its horse and we will," he added.

Calhoun was a director at Boeing for a decade before taking over as chief executive earlier this month. The board ousted Dennis Muilenburg in December amid rising anger among regulators, politicians and customers.

He said the company should have not have repeatedly revised the plane's forecasted return. "It was hard for anybody to trust us," Calhoun said.

Calhoun said before certification there will be "a few more things somewhere along the way that the FAA and us will determine need a little extra work and we'll do it. They won't be big emergencies things, they won't be things that take the airplane down."