Boeing is facing financial difficulties due to mounting losses and a machinist strike that has been ongoing for five weeks. The company plans to cut 10% of its workforce, amounting to approximately 17,000 employees. They are expecting to report a loss of $9.97 per share in the third quarter, due to charges in both their commercial airplane unit and defense business. Additionally, Boeing has announced delays in the delivery of its 777X wide-body plane until 2026 and will stop producing commercial 767s in 2027.
CEO Kelly Ortberg highlighted the challenges facing the company and emphasized the need for tough decisions and structural changes to ensure competitiveness and customer satisfaction in the long term. Ortberg, who recently took over as CEO, has been tasked with restoring Boeing after safety and manufacturing crises. However, the labor strike has presented a significant hurdle.
Credit ratings agencies have warned that Boeing may lose its investment-grade rating and the company is currently burning through cash. S&P Global Ratings estimated that Boeing is losing over $1 billion a month due to the strike. The tensions between the manufacturer and the union have been escalating, with the machinists rejecting a tentative agreement and Boeing withdrawing a contract offer.
Overall, Boeing is facing significant challenges and is undergoing cost-cutting measures to address its financial struggles and ensure its long-term viability in the industry.
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