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Boeing To Cut 737 Max Production By 20% After Pair Of Crashes

Boeing Co (BA) plans to cut 737 MAX production by 20 percent in the wake of two deadly crashes, CEO Dennis Muilenburg said. The production will be cut to 42 airplanes per month from 52 Starting mid-April, the company said on Friday, but Boeing said that it does not plan any layoffs due to the reduction in output.

Muilenburg said the company now knows that a chain of events caused a Lion Air crash in Indonesia last October and the Ethiopia disaster, with erroneous activation of so-called MCAS anti-stall software 'a common link' between the two.

Boeing said it continues to make progress on a 737 MAX software update to prevent 'accidents like these from ever happening again,' he said.

In after-hours trading, Boeing's shares were down 2.26% to $383.09

"We're adjusting the 737 production system temporarily to accommodate the pause in MAX deliveries, allowing us to prioritize additional resources to focus on software certification and returning the MAX to flight," Boeing Chairman and CEO Dennis Muilenburg said in a statement.

Boeing will also establish a committee on its board of directors to review how it develops and builds planes, Muilenburg said.

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