A photo of the Boeing 737 MAX aircraft at the company’s factory in Renton, Washington, on September 12, 2024.
Stephen Brashear | AP
Boeing will cut 10% of its workforce, or about 17,000 people, as the company’s losses mount and machinists’ strike has idled its aircraft factories entering its fifth week. It will also push back the long-delayed launch of the new wide-body aircraft.
The manufacturer will not provide it The 777X has not yet been certified wide-body aircraft until 2026, six years later than planned. The company in August suspended test flights of the plane in response to the discovery structural damage in one of them. CEO will stop production of commercial 767 cargo aircraft in 2027 after completing remaining orders Kelly Ortberg said in a staff memo Friday afternoon.
“Our business is in a difficult situation and it is difficult to overstate the challenges we face together,” Ortberg said. “In addition to navigating the current environment, revitalizing our company requires difficult decisions and we will have to make structural changes to ensure we can remain competitive and deliver provided to its customers over a long period of time.”
Boeing is expected to report a loss of $9.97 per share in the third quarter, the company said in a surprise announcement Friday. It is expected to report pre-tax charges of $3 billion for its commercial aircraft segment and $2 billion for its defense business.
In preliminary financial results, Boeing said it expected operating cash flow of $1.3 billion in the third quarter.
The job and cost cuts are the most dramatic moves to date by Ortberg, who is just over two months into his tenure, tasked with getting Boeing back on track after safety crises. and production, including a near-disastrous mid-air door jam. broke out earlier this year.
The machinists’ strike was another challenge for Ortberg. Credit rating agencies have warned the company is at risk of losing its investment-grade rating, and Boeing has been burning through cash in what company leaders hope will be a transformative year.
Boeing is losing more than $1 billion a month due to a strike by more than 30,000 machinists, which began on September 13 after being overwhelmed by machinists, S&P Global Ratings said earlier this week. voted down a tentative agreement the company has reached with the union. Tensions were growing between the manufacturer and the International Association of Machinists and Aerospace Workers, and Boeing withdrew the new contract delivered earlier this week.
On Thursday, Boeing said it filed an unfair labor practice complaint with the National Labor Relations Board, accusing the International Association of Machinists and Aerospace Workers of negotiating in bad faith. and misrepresenting the proposals of aircraft manufacturers. The union criticized Boeing for a sweetener offer that it said had not been negotiated with the union and said workers would not vote on it.
The job cuts, which Ortberg said would take place “in the coming months,” would come just as Boeing and hundreds of its suppliers are scrambling to staff in the wake of the Covid-19 pandemic, as demand decline.
