Boeing has said that it will temporarily stop producing its grounded 737 Max jet starting in January as it struggles to get approval from regulators to put the plane back in the air.
Federal regulators had warned the company last week that it had unrealistic expectations for getting the plane back into service.
The Max is Boeing’s most important jet, but it has been grounded since March following the Lion Air crash last October and the Ethiopian Airlines disaster in March.
The crashes killed everyone on board both Boeing’s 737 Max aircrafts, a total of 346 people.
Angle-measuring sensors in both planes are known to have malfunctioned, alerting anti-stall software to push the noses of the planes down.
The pilots were unable to take back control of the aircraft in both cases.
In October, an Indonesian investigation into the Lion Air flight found that it was doomed by a combination of aircraft design flaws, inadequate training and maintenance problems.
A final accident report said Lion Air flight 610, from Indonesia’s capital Jakarta to the island of Sumatra, crashed because the pilots were never told how to quickly respond to malfunctions of the Boeing 737 Max 8 jet’s automated flight-control system.
On Monday, Boeing said production would halt at its plant with 12,000 employees in Renton, Washington, near Seattle.
The Chicago-based company said it does not expect any layoffs as a result of the production halt “at this time”.
But redundancies could ripple through some of the 900 companies that supply parts for the plane.
In a statement, Boeing said it will determine later when production can resume.
“We believe this decision is least disruptive to maintaining long-term production system and supply chain health,” the statement said.
The company’s stock came under pressure on Monday after the Wall Street Journal reported on the possibility of a Max production halt.
It closed on Monday down more than $14, or 4.3%, at $327.
The stock has fallen 23% since the March 10 crash of a Max flown by Ethiopian Airlines.