Boeing’s CEO, Kelly Ortberg, has issued a stark warning as the aerospace giant grapples with soaring losses estimated at approximately $6 billion (£4.6 billion). Ortberg, who assumed leadership in August, emphasized that the company is at a “crossroads” and is working “feverishly” to stabilize its operations and repair its tarnished reputation following a series of manufacturing and safety concerns.
The company’s challenges are further compounded by a strike involving over 30,000 workers in the United States, which has persisted for more than a month and significantly disrupted the production of several aircraft models. As workers prepare to vote on Wednesday regarding Boeing’s latest pay and benefits proposal, the company faces mounting pressure to reach a resolution. Ortberg expressed optimism that the proposed plan, which includes a 35% pay increase over four years, will be accepted, although he acknowledged that substantial obstacles remain in the path to resetting the business.
“This is a big ship that will take some time to turn, but when it does, it has the capacity to be great again,” Ortberg stated in prepared remarks. He further noted that Boeing is “saddled with too much debt” and has disappointed customers due to performance lapses across its operations.
The current crisis for Boeing intensified in January when a dramatic mid-air incident involving a passenger plane raised safety concerns. Additionally, the company’s space division faced setbacks when its Starliner vessel was forced to return to Earth without carrying astronauts, casting further doubt on its reliability.
The ongoing strike has exacerbated Boeing’s issues, leading to a significant slowdown in production rates. The commercial aircraft segment reported operating losses of $4 billion in the last quarter, while the defense unit incurred losses nearing $2.4 billion.
Despite these challenges, Ortberg reassured investors that Boeing maintains a robust backlog of approximately 5,400 aircraft orders. However, he cautioned that restarting production facilities after the strike concludes will be a complex process. “It’s much harder to turn this on than it is to turn it off,” he warned, underscoring the need for precision in managing the transition.
Boeing also announced earlier this month plans to cut roughly 10% of its workforce, while thousands of employees are already on a rolling furlough due to the ongoing strike, impacting suppliers as well. Ortberg emphasized that his primary focus is on instigating a “fundamental culture change” within the company. “We need to prevent the festering of issues and work better together to identify, fix, and understand root causes,” he stated.
As Boeing navigates this turbulent period, the company faces the dual challenge of resolving labor disputes and restoring confidence in its operations amid growing financial pressures.
