Boeing reports a loss of $6 billion due to a major error that ‘severely reduced performance’

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Boeing reported a $6 billion quarterly loss and said it would continue to lose money as new chief executive Kelly Ortberg warned the plane maker must reform its culture to end the long-running crisis years of shaking the confidence of customers and investors.

The aircraft manufacturer burned through $2 billion in cash in the third quarter, bringing its total cash outflow to $10 billion this year. Chief Financial Officer Brian West said it will continue to use cash in 2025 as it prepares to ramp up 737 Max production and expand 777X inventory, although he said cash burn will be less than with the year 2024.

“Things will change in the second half [of 2025]and then we will exit with more momentum as production at the factories stabilizes and recovers,” he said.

Ortberg said it’s “too early” to say whether Boeing will stick to its 2022 target of generating $10 billion in free cash flow by 2025 or 2026.

The new CEO told employees and investors that Boeing was “at a crossroads” and that a “severe decline in performance” had led to an erosion of confidence, mounting debt and customer disappointment.

He added that he wants to stabilize the business, improve the aircraft manufacturing process and see executives “closely integrated into our business and the people who are doing the design and manufacture our products”.

His comments came the same day as the company’s 33,000 mechanics in Washington gathered. vote on whether to accept a proposed deal with the company to end the nearly six-week strike.

The offer to increase salary by 35% within 4 years has improved compared to the company’s initial offer of 25%. It includes performance bonuses and better retirement benefits but does not restore the defined benefit pension that many workers are still angry about losing. a bitter war in 2014.

Ortberg said he was “very hopeful” the agreement would end the strike.

In contrast to his predecessor Dave Calhoun, Ortberg moved to Boeing’s manufacturing center in Washington from Florida after joining the company. “We need to be on the factory floors, in the back shops and in our engineering labs,” he said Wednesday. “We need to know what’s going on.”

The company also needs to develop a new plane “at the right time in the future,” he said, “but we have a lot of work to do before that,” including “restoring the balance sheet.” so we have a route to the next commercial plane.”

The US aerospace champion, which has been in crisis for the past five years, has spent billions of dollars this year trying to resolve quality and production problems after the door explosion. of a commercial flight in January. Ortberg said this month that the company would cut 17,000 jobs “to adjust [the workforce] with our financial reality.”

Earlier this month, the company reported that it would take a $5 billion charge in the third quarter, while reporting a loss of $9.97 per share — nearly four times larger than in the third quarter of 2023 — on revenue of 17.8 billion USD.

The roughly $2.6 billion charge stems from delaying 777X deliveries by another year until 2026 – six years after airlines were initially promised the planes. Another $2 billion comes from losses on fixed-price defense contracts, and about $400 million comes from shutdowns and the company’s decision to discontinue 767 production in 2027, although they will continue produces a military version of the KC cargo plane – Refueling Tanker 46A.

But Ortberg said Boeing would not abandon its money-losing defense contracts, which produce products vital to its most important customer, the U.S. government.

“Leaving is not the answer,” he said.

Boeing said last week it could selling shares worth up to 25 billion USD for more than three years but declined to comment further on the size or timing of the share capital increase. The manufacturer had $10.5 billion in cash and marketable securities at the end of the third quarter, just above the threshold needed for operations, and is “actively managing liquidity.”

Boeing shares traded down 1.6% on Wednesday and were 37% lower than at the start of the year.