Boeing threatens to cancel Boeing 737 Max unless given safety exemption

My understanding is that they can build the plane, but if they were to add the required EICAS system (which approval in 2023 or beyond would require), they would require a new type rating for the aircraft, meaning it wouldn't be able to be interchanged in an existing fleet of 737 type aircraft.

Therefore there's a commercial pressure from customers for the aircraft to be of the same type approval as earlier aircraft, so existing crew can fly it.

It does sound like this ultimately stems from having preserved an old design for a long time - at some time you'll need to accept a new type rating in order to add new systems, but the short term commercial goal of operators of the aircraft is to seek to run similar fleet on a single type rating?

Therefore they have a choice, and can build the plane, just it might require a different approval that customers might find less appealing.

One solution to this would be to tighten up on type similarity, to prevent incentives like this leading to long term stagnation in aircraft safety systems to avoid introducing a new type, or a simulator training requirement (see MCAS and lack of AoA sensor redundancy)