There is no argument that Boeing (BA) has indeed had a rough year.
The company has been entangled in multiple lawsuits and federal investigations ever since a door plug blew off of an Alaska Airlines plane (a Boeing 737 Max 9 aircraft) mid-flight in January. The plane was carrying 171 passengers and was forced to make an emergency landing.
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The incident went viral on social media, and it put a major dent in the company’s financial status as it was forced to halt production of its Boeing 737 Max aircraft, inconveniencing many airlines that had pre-ordered the plane.
Related: Boeing makes a harsh decision to repair its finances amid strike
To add fuel to the fire, Boeing is also facing a major ongoing strike from about 33,000 unionized workers who are fighting for a new contract that contains better pay, lower out-of-pocket health care costs, retirement security and other benefits.
The strike has been roaring for over a month, and negotiations over a new contract have not been successful. Most recently, the International Association of Machinists, the union that’s representing Boeing’s striking workers, rejected Boeing’s latest contract proposal on Oct 24., which included 35% wage increases over four years, a $7,000 ratification bonus and other adjustments.
Analysts have estimated that the strike will cost Boeing about $1 billion per month, which will further exacerbate the company’s financial woes.
Boeing CEO addresses the company’s recent losses
Boeing just revealed its third-quarter earnings report for 2024, and it disclosed that it faced a whopping $5.7 billion loss from operations during the quarter, with revenues shrinking by 1%, compared to the same time period last year.
During an earnings call on Oct. 23, which discussed the report, Boeing CEO Kelly Ortberg revealed that the company is “at a crossroads” and admitted it has let its customers down.
“The trust in our company has eroded or saddled with too much debt,” said Ortberg. “We've had serious lapses in our performance across the company, which have disappointed many of our customers.”
Related: Striking Boeing workers make unexpected decision in contract vote
Ortberg took over as Boeing CEO on Aug. 8, replacing Dave Calhoun, who was CEO at the company for four years.
During the call, Ortberg also laid out his mission to push the company in the right direction, which involves changing the company’s culture. He also claimed that leaders need to be more involved with product production.
More Boeing:
- Boeing delivers hard-nosed message to employees amid strike
- Traveling may get a lot more frustrating with latest Boeing issue
- Boeing’s 'hardball' play with striking workers backfires
“Our leaders from me on down need to be closely integrated with our business and the people who are doing the design and production of our products,” said Ortberg. “We need to be on the factory floors, in the back shops and in our engineering labs. We need to know what's going on, not only with our products, but with our people. And most importantly, we need to prevent the festering of issues and work better together to identify, fix and understand root cause.”
The CEO also stated that the company is “feverishly working to find a solution” to the IAM strike.
“I've met with the union leadership the first week on the job and let them know that I was committed to resetting the relationship,” said Ortberg.
Related: Veteran fund manager sees world of pain coming for stocks
