Why didn’t Boeing ramp 737NG production back up in response to the 737 MAX groundings?

Question

The predecessor of the currently-grounded 737 MAX is the 737 Next Generation (737NG), produced from 1997 through 2019. The NG family (comprising the 737-600, -700, -800, and -900) is extremely similar to the MAX, with the main differences between the two families being the engines and mountings thereof (the 737NG uses the GE/SNECMA / GE/SAFRAN / CFM International CFM56 engine, housed in distinctive hamster-pouch nacelles, while the 737 MAX uses the Franco-American consortium’s newer, larger LEAP engine and mounts it in bog-standard round nacelles which are located further forward and higher above the ground than those of the NG¹), the landing gear (the NG uses the same short-legged landing gear dating all the way back to the 737-100 in 1967,² while the MAX’s landing gear is longer than that of all prior 737s³), and parts of the flight-control system (the MAX’s larger, more-forwardly engines cause it to handle slightly differently than the NG at very high angles of attack, so its pitch trim system was modified to introduce additional nose-down trim at high attack angles in order to make the MAX handle more like the NG and thereby ease cross-training of pilots; unfortunately, the modified trim system proved susceptible to inducing an uncontrollable nose-down trim runaway in the presence of certain sensor failures, which is why the MAX is currently grounded).

When the MAX was grounded in mid-March 2019, the NG was still in large-scale production, although the assembly lines were ramping down in preparation for a switch to producing the MAX and only the MAX; it would not have been particularly difficult to ramp production back up to full scale, enabling Boeing to continue producing, selling,⁴ and delivering airworthy 737s for the duration of the MAX’s grounding. Boeing, however, did not do this, and instead continued to taper off NG production (finally ending it entirely at the end of 2019), while continuing to build and accumulate undeliverable MAXes until being forced to put production on hold in January 2020 for want of space to put them (thus marking the first time in the half-century-plus history of the 737 that production has ever stopped completely).

Why didn’t Boeing reincrease 737NG production in response to the MAX’s woes, rather than shutting it down completely and leaving the company with no deliverable 737s?

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¹: Which is part of the reason why the MAX, despite its larger engines, does not require hamster-pouch nacelles.

²: Which is the reason why the NG does require hamster-pouch nacelles (as did the 737 Classic before it), as the ground clearance beneath the wings (designed for the 737 Original and its slim Pratt & Whitney JT8Ds) would be too small to safely mount the CFM56 otherwise. Even with the hamster-pouch nacelles (the pouches of which contain the engine accessories, moved from the bottom of the engine to the sides), SNECMA still had to shrink the diameter of the engine’s fan in order to get an acceptable amount of ground clearance, which is why the CFM56s used on the 737 Classic and NG are slightly smaller and less efficient (due to the decrease in bypass ratio resulting from the shrunken fan) than those used on the KC-135R/T, DC-8-70, and A319/20/21ceo.

³: Which is the other part of the reason why the MAX, despite its larger engines, does not require hamster-pouch nacelles.

⁴: Possibly, although not necessarily, involving offering MAX customers the opportunity to switch their orders to NGs, potentially along with other incentives to sweeten the deal (such as refunding them the difference between the prices of an NG and a MAX, or slightly more [thus turning an undeliverable MAX order into a discounted, but deliverable, NG order], and/or giving them a discount on future purchases of Boeing aircraft).

Answer 1

There are several reasons why.

First, it takes an awfully long time to make that kind of switch. While one can switch an assembly line for a product, that works rather differently for (say) transistor radios and Boeing 737s. The assembly line for an airliner winds back very, very far, and nothing happens or can happen immediately, or even very fast.

That would have made it very difficult, even if Boeing wanted to do that.

And here's a second reason: they didn't want to. They had orders for the MAX. If they were late in delivering those aircraft, they could be subject to financial penalties. Boeing agreed to deliver the aircraft, so had to build them. At the same time, they weren't facing overwhelming demand for other 737s that could possibly have made it worthwhile to do it in the circumstances.

A third reason: Boeing had every expectation that the aircraft would soon be allowed to fly again, and continued to operate under that expectation (for much longer than many observers shared the same expectations, it has to be said).

A fourth reason: it would have been bad for business to do that. Doing what you suggest would have sent out the most appalling signals, i.e. that the company had lost faith in one of its most important products. In a way, they simply had to hope that things would turn their way sooner rather than later, and the option of turning away from that would have had tremendous costs. (You might argue that it was a gamble that didn't pay off; I think that would be fair enough to say.)

And finally, I think that Boeing's slow responses at many points in this story look like the behaviour of a company in shock. On multiple occasions, the company has found itself struggling to keep up with and make sense of events, even if they been events of their own making. Quite possibly the company's decision not to do as you suggest, or at least not to have done it much sooner, will turn out to have been a very bad one, but unfortunately, it will also have been only one in a long chain of them.

By the time I make several bad decisions in a row in a crisis, it's pretty much guaranteed that the next one I make will make everything even worse. Organisations also fall victim to that pattern.

Answer 2

One factor, probably the biggest factor in my opinion, is that a production program is a ship that takes a year or so to change direction and the decisions and planning for the ramp-down were taken long before the event.

Think about the supply chain cascade that has to happen to increase the number of a particular gee-gaw like an actuator of some kind; LRU supplier has to ramp up, which means its sub suppliers have to ramp up, which means their sub suppliers have to ramp up, which means... well I should be down to nuts and screws at this point. Add a couple of months up each step in the chain and pretty soon you're looking at 6 months to a year before anything happens.

On top of that, this was probably unpopular with the airlines themselves, and the crisis itself has a nebulous end date (should all be resolved in 6 months... ooops pushed back to 9 months.... ooops pushed back to a year... and so on). No one said, "this is going to take 2-3 years and we need to plan for that now".

Answer 3

The short answer is money. The market dictates what Boeing builds. The demand has to come before the supply on something that expensive. The NG production line had orders to fill. After the orders were done, there was no need for the NG line. If serious demand for the NG returns, it might make financial sense for the NG production line to return.