Arconic expects to lose $400M in sales and could cut jobs this year as a result of Boeing’s halted production of the 737 MAX, according to SeekingAlpha.

Uncertainty over MAX production is the biggest challenge facing Arconic in 2020, prompting Arconic to consider staff cuts, extended vacations and shift pattern changes, CEO John Plant stated during an earnings conference call.

While business for Airbus jetliners and military aircraft is strong, it is difficult to switch workers to alternative products, Plant explained.

His comments came after Arconic reported revenue in its Engineered Products & Forgings segment, primarily from fasteners, rose 5% to $7.1 billion in 2019. Segment operating profit increased 26% to $1.39 billion, while profit margin gained 330 basis points to 19.6%.

EP&F capital expenditures dropped 15.5% to $344 million during the year.

Consolidated Arconic revenue edged up 1% to 14.2 billion in 2019, while net income declined 26.8% to $470 million.

“In 2019, the Arconic team delivered improved revenue, adjusted operating income, adjusted operating income margin, adjusted free cash flow and adjusted earnings per share,” Plant added.

During the fourth quarter, EP&F revenue increased 1% to a record $1.7 billion, which included 2% organic growth, driven aerospace growth, partially offset by weakness in commercial transportation. Segment operating profit improved 32% to $354 million, driven by net cost reductions, favorable product pricing, lower raw material costs and volume increases. Profit margin rose 480 basis points to 20.4%.

Costs incurred in the quarter included legal and other advisory fees related to the fire at Acronic’s fastener plant in France.

The company said separation is on track for April 1. The EP&F businesses will remain in the existing company, which will be renamed Howmet Aerospace Inc. at separation, while the GRP businesses will be named Arconic Corporation at separation. Web: Arconic.com