Boeing CEO Kelly Ortberg announced a comprehensive review of the company’s operations as it grapples with a staggering quarterly loss of $6 billion, largely attributed to an ongoing strike affecting around 33,000 workers. The company has reported total losses nearing $8 billion for the year, exacerbated by production halts on its 737 MAX, 777, and 767 aircraft.
In a letter to employees, Ortberg emphasized the necessity for a cultural transformation within the company to stabilize its operations and improve performance in both the defense sector and key aircraft programs. He acknowledged that Boeing's once-iconic reputation has been severely damaged.
Boeing CFO Brian West indicated that the company anticipates continued cash burn through 2025, resulting in a 1.7 percent drop in share prices. West mentioned potential plans for equity offerings to address the company's financial situation, although specific timelines were not provided.
Ortberg's leadership, which began in August, has already proposed significant downsizing measures, including the possibility of asset sales and workforce reductions. The current strike poses additional challenges, as the company aims to resume production amid ongoing supply chain issues.
Despite the difficulties, Ortberg expressed optimism about a new contract proposal being voted on by striking workers, although analysts remain cautious about its ratification. He also noted that restarting production, particularly for the 737 MAX, will be complicated by recent supplier furloughs and investment delays.
In the latest financial report, Boeing recorded a cash burn of $1.96 billion for the quarter, in stark contrast to $310 million from the previous year, alongside a slight revenue decline of 1 percent to $17.84 billion.