Boeing, one of the world’s leading aerospace companies, has been facing a tough time in recent years. The company has reported a loss of over $6 billion in the third quarter, and their reputation has taken a hit due to various issues. However, the new CEO Kelly Ortberg is determined to turn things around and bring Boeing back to its former glory.
In his address to investors, Ortberg emphasized the need for a “fundamental culture change” within the company. He believes that spending more time on factory floors and understanding the root cause of issues will help prevent them from festering in the future. He also stressed the importance of resetting the relationship between management and labor, in order to avoid any disconnection in the future.
Ortberg’s main focus at the moment is to end the crippling strike that has been going on for nearly six weeks. The strike, led by 33,000 machinists, has caused major disruptions in Boeing’s production, particularly in the Seattle area. The new CEO is hopeful that the machinists will vote to accept the company’s latest contract offer and end the strike.
The strike is also an early test for Ortberg, who took over as CEO in August. He has already announced plans for large-scale layoffs and is working towards raising enough cash to avoid bankruptcy. In addition, he needs to convince federal regulators that Boeing is addressing its safety culture and is ready to increase production of the 737 Max, which is crucial for the company’s financial stability.
However, all of these plans are on hold until the strike is resolved. Boeing cannot produce any new 737s until the machinists return to work. This is why Ortberg is laser-focused on getting the negotiation completed and ending the strike.
The company’s financial situation is also a cause for concern. Boeing has not had a profitable year since 2018, and the situation is expected to worsen before it gets better. In the third quarter, the company reported a loss of $6.17 billion, with an adjusted loss of $10.44 per share. This is slightly higher than what analysts had predicted.
Despite these challenges, Ortberg remains determined and focused. He is expected to project a sense of calm, determination, and urgency during the earnings call, which will be his first since taking over as CEO. The biggest news of the day, however, will come in the evening when the International Association of Machinists and Aerospace Workers reveals the results of the vote on the company’s contract offer.
The offer includes a 35% pay raise over four years, $7,000 ratification bonuses, and the retention of performance bonuses that Boeing had initially wanted to eliminate. However, the company has not budged on the union’s demand to restore the traditional pension plan that was frozen a decade ago. While older workers will see a slight increase in their monthly pension payouts, the union is not satisfied.
At a picket line outside Boeing’s factory in Everett, Washington, some machinists are encouraging their colleagues to vote against the contract offer. They believe that the pension should have been the top priority and that the pay increase should be higher to offset years of stagnant wages and high inflation.
Despite the challenges, the picketers are showing great solidarity and are determined to stick with their union brothers and sisters. They believe that Boeing can do better and are not willing to settle for anything less.
In conclusion, Boeing is currently facing some tough challenges, but the new CEO Kelly Ortberg is determined to turn things around. He is focused on bringing about a culture change within the company and resetting the relationship between management and labor. The strike is a major hurdle, but Ortberg is hopeful that the machinists will vote to accept the company’s offer and end the strike. With the right focus and culture, Boeing can once again become an iconic company and a leader in the aerospace industry.
