Boeing 737 MAX airliners are pictured at the corporate’s factory in Renton, Washington, on Sept. 12, 2024.
Stephen Brashear | AP
Boeing will cut 10% of its workforce, or about 17,000 people, as the corporate’s losses mount and a machinist strike that has idled its aircraft factories enters its fifth week. It would also thrust back the long-delayed launch of its recent wide-body airplane.
The manufacturer is not going to deliver its still-uncertified 777X wide-body plane until 2026, putting it some six years behind schedule. The corporate in August paused flight tests of the aircraft when it discovered structural damage in one in every of them. It would stop making business 767 freighters in 2027 after it fulfills remaining orders, CEO Kelly Ortberg said in a staff memo Friday afternoon.
“Our business is in a difficult position, and it is tough to overstate the challenges we face together,” Ortberg said. “Beyond navigating our current environment, restoring our company requires tough decisions and we can have to make structural changes to make sure we will stay competitive and deliver for our customers over the long run.”
Boeing expects to report a lack of $9.97 a share within the third quarter, the corporate said in a surprise release Friday. It expects to report a pretax charge of $3 billion within the business airplane unit and $2 billion for its defense business.
In preliminary financial results, Boeing said it expects to have an operating money outflow of $1.3 billion for the third quarter.
The job and price cuts are probably the most dramatic moves up to now from Ortberg, who’s just over two months into his tenure in the highest job, tasked with returning Boeing to stability after safety and manufacturing crises, including a near-catastrophic midair door-plug blow out earlier this 12 months.
The machinist strike is yet one more challenge for Ortberg. Credit rankings agencies have warned the corporate is prone to losing its investment-grade rating, and Boeing has been burning through money in what company leaders hoped could be a turnaround 12 months.
S&P Global Rankings said earlier this week that Boeing is losing greater than $1 billion a month from the strike of greater than 30,000 machinists, which began Sept. 13 after machinists overwhelmingly voted down a tentative agreement the corporate reached with the union. Tensions have been rising between the manufacturer and the International Association of Machinists and Aerospace Employees, and Boeing withdrew a more moderen contract offer earlier this week.
On Thursday, Boeing said it filed an unfair labor practice charge with the National Labor Relations Board that accused the International Association of Machinists and Aerospace Employees of negotiating in bad faith and misrepresenting the plane makers’ proposals. The union had blasted Boeing for a sweetened offer that it argued was not negotiated with the union and said employees wouldn’t vote on it.
The job cuts, which Ortberg said would occur “over the approaching months,” would hit just after Boeing and its lots of of suppliers have been scrambling to staff up within the wake of the Covid-19 pandemic, when demand cratered.
