Troubled aerospace giant the Boeing Co. on Wednesday reported a loss of over $6 billion last quarter, leading its new chief to acknowledge a lack of public trust, high debt and deep performance problems.
President and CEO Kelly Ortberg conceded in a call with investors that the company is facing numerous obstacles and must work to reset its relationship with the union and change its workplace culture.
鈥淲e鈥檝e been feverishly working to find a solution that works for the company and meets our employees鈥 needs,鈥 Ortberg said. 鈥淚鈥檓 very hopeful that the package we put forward will allow our employees to come back to work so we can immediately focus on restoring the company.鈥
The earnings call comes amid a widespread strike by employees, after 33,000 International Association of Machinists and Aerospace Workers walked off the job on the West Coast about six weeks ago.
People are also reading…
IAMAW union members, based at Seattle plants, voted down a proposed contract Wednesday night. The union is demanding higher wages, secure retirement, improved medical coverage, job security, paid time off and overtime, among other things.
Boeing operates its defense business, which is in a separate unit from the company鈥檚 commercial plane segment, in the 51黑料 area and employs about 15,000 people. Local workers have not been on strike, but Boeing said cuts made in response to the strike were done company-wide.
Brian West, Boeing鈥檚 chief financial officer, said that the demand for Boeing鈥檚 defense products remains very strong, 鈥渟upported by the threat environment confronting our nation and our allies.鈥
鈥淲e still expect the business to return to historical performance levels as we stabilize production, execute on development programs and transition to new contracts with tighter underwriting standards,鈥 West said.
Boeing lost $2 billion on the T-7A, KC-46A, Commercial Crew and MQ-25 programs, according to recent filings. The T-7A Red Hawk flight training system and MQ-25 Stingray aerial refueling drone are produced in the 51黑料 area.
During the investor call company leaders reported an overall loss in revenue, down to $17.8 billion for the third quarter, about 1% less from the same period a year ago, and a core loss per share of $10.44, which reflects impacts from the work stoppage. The company also announced an operating cash flow deficit of $1.3 billion and said that it expects negative free cash flow for 2025.
West said spending will be slower in 2025 than this year.
鈥淲e have to have a return to work,鈥 said West. 鈥淲e鈥檙e going to exit with more momentum as the production in the factories heal and recover.鈥
Last week, Boeing announced a workforce reduction of 10%, or about 17,000 jobs. Ortberg said this will force consolidation in some areas and will reduce nonessential activity.
鈥淚 wouldn鈥檛 think of it like we鈥檙e going to take people off the production or out of the engineering labs,鈥 Ortberg said. 鈥淭hat鈥檚 not our intent here. It鈥檚 about getting ourselves more efficient and have a more lean and mean machine going forward, and I think that鈥檚 going to be really important as we ramp up the production.鈥
On the commercial side, Boeing said that the production ramp-up for the 737 MAX was delayed by the strike, and it hopes to reach its goal of producing 38 of the 737 aircraft per month by the end of the year. The 737 has been under scrutiny following an incident on a 737 Max 9 operated by Alaska Airlines, when a panel blew out during a flight in January.
The company also said that the 777X, the world鈥檚 largest and most efficient twin-engine jet, would be delayed again. It was initially scheduled to begin service in 2020, but Boeing now expects to make the first delivery in 2026.
鈥淭his is a company that ushered in the new era of air travel and helped land the first man on the moon,鈥 Ortberg said. 鈥淕etting back to the values that helped define this legacy is what will define our future.鈥
Top companies in 51黑料 ranked by their revenue.
