US Economy

Cramer: 'I'm very worried about Boeing' and how its 737 Max problems could hurt the US economy

Key Points
  • Boeing's prolonged struggles with its 737 Max jet could spill over and hurt the entire U.S. economy, CNBC's Jim Cramer warns.
  • "I think Boeing is hugely important to the economy. Companies that are supplying to Boeing are kind of pulling back," the "Mad Money" host says.
  • While the October jobs report beat expectations, "I think this jobs number is going to get worse if Boeing isn't resolved," Cramer says.
Cramer: 'I'm very worried about Boeing'

CNBC's Jim Cramer said Friday that he is concerned Boeing's prolonged struggles could spill over and hurt the entire U.S. economy.

"I think Boeing is hugely important to the economy," Cramer said on "Squawk Box." "Companies that are supplying to Boeing are kind of pulling back."

"I think if we're going to see problems in the economy, it's going to be people realizing that Boeing is probably the largest generator of jobs in this country now, and I'm very worried about Boeing."

Cramer's remarks follow two days of testimony on Capitol Hill this week by Boeing CEO Dennis Muilenburg, who was critically questioned by lawmakers over the company's handling of its 737 Max jet.

The planes have been grounded worldwide since March after two of them crashed — one in October 2018 and the other in March — killing 346 people in total. The Max's malfunctioning flight-control system has been implicated in the disasters.

Comments by the "Mad Money" host also come after Friday's release of October jobs data, which showed the addition of a better-than-expected 128,000 nonfarm payrolls despite the General Motors strike.

However, Cramer said, "I think this jobs number is going to get worse if Boeing isn't resolved."

While Boeing is still making its best-selling 737 Max, as it hopes to regain regulatory approval by the end of the year, "you're going to see very different" jobs numbers if production is halted, Cramer said.

Production costs for the 737 Max rose by $900 million in the third quarter, in addition to the $2.7 billion in extra costs it announced earlier this year, the company said in its earnings report released last week.

Concerns about Boeing are not isolated to just the 737 Max.

The company last week said it would reduce monthly production rates of its 787 Dreamliner from 14 to 12 starting late next year, "given the current global trade environment."

Rep. John Garamendi, D-Calif., meanwhile, has been critical of how the Chicago-based airplane manufacturer has struggled to deliver a new line of aerial refueling tankers for the Air Force.

"We have a serious problem with Boeing in the military side of it," the California Democrat told CNBC earlier this week, pointing to cost overruns and years of delays.

The problems with the 737 Max and the refueling tankers raise questions about Boeing's fitness for future government contracts, Garamendi said.

On Friday, Australia's Qantas Airways said it is grounding three of its Boeing 737 NG jets — which is different from the 737 Max — after it found cracks in the wings of three planes. It does expect them to fly again this year.

Dozens of other older 737s have been grounded too, Boeing said.

"Boeing's got to get this behind them, and this was a very tough week for what I regard as America's greatest company," Cramer said.

Boeing has many more problems than the 737 Max, Rep. John Garamendi warns