Boeing Rises on Plans to Update Software on Grounded 737 MAX

Boeing says it will make two new software updates to the 737 MAX's flight control computer.
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Boeing  (BA) - Get Report shares were climbing 4% to $147.30 Wednesday after the aerospace giant said it would make two new software updates to the 737 MAX's flight control computer as the company looks to get the troubled aircraft back in the air following two fatal crashes.

The company said that one issue involves hypothetical faults in the flight control computer microprocessor, which could potentially lead to a loss of control known as a runaway stabilizer, according to Reuters. 

A safety system on the MAX caused the jet to dive automatically in both accidents, but the problems aren’t related, Boeing said, according to Bloomberg.

The other issue could potentially lead to disengagement of the autopilot feature during final approach. Boeing said the software updates will address both issues.

Software on the MAX jet has been undergoing a redesign after being linked to the two fatal crashes in October 2018 and March 2019.

The U.S. Federal Aviation Administration said it has been in contact with the company about the issues, saying "manufacturer must demonstrate compliance with all certification standards."

The 737 MAX has been grounded worldwide since March 2019 and Boeing halted production of the aircraft in January.

Boeing, meanwhile, said it will temporarily suspend all 787 operations at its factory in Charleston, South Carolina, after Gov. Henry McMaster issued an order Monday mandating that residents must stay at home and limit non-essential activity.

In response, Boeing supplier Spirit AeroSystems  (SPR) - Get Report said it would be taking cost-cutting measures. 

Spirit said Wednesday it was reducing pay for all executives in the U.S. by 20%,  and it was furloughing for the next three weeks all production managers and workers assigned to Boeing programs at the company's plants in Wichita, Kan., and in Tulsa and McAlester, Okla.

The Wichita-based company said work on defense projects and on Airbus  (EADSY)  and other non-Boeing projects would continue at the three plants.