On Wednesday, October 23, Boeing reported a loss of $6.17 billion for the third quarter. CEO Kelly Ortberg has set a cautious path to turn around the company, vowing to undergo a “fundamental cultural change” for this troubled aircraft manufacturer.
According to Reuters, Boeing has accumulated nearly $8 billion in losses this year due to strikes halting production of the Boeing 737 MAX, 777, and 767 planes, as well as challenges in its defense and space sectors.
Boeing’s Chief Financial Officer Brian West told analysts that he expects the company to continue burning cash in the last three months of 2024 and throughout 2025. This information led to a 3.1% drop in Boeing’s stock price to $154.86.
In a letter written to employees on Wednesday morning, CEO Ortberg emphasized the need to improve the performance of the defense business, as well as the 737 MAX and 777 projects, while overall stabilizing the Boeing company. Following a series of aircraft incidents that damaged its reputation, the company is at a “crossroads.”
Ortberg, who was appointed as Boeing’s CEO in August of this year, said in the letter to employees: “We need to know what happened, not just our products, but our people as well.”
“Most importantly, we need to prevent the situation from worsening and collaborate better to identify, address, and understand the root causes,” he said. He admitted that Boeing’s reputation has been damaged, compromising its “iconic” status in the aircraft manufacturing industry.
“This is a big ship that takes some time to turn around, but when it does, it has the capability to be great again,” Ortberg told Boeing employees.
CFO West stated that Boeing plans to address the company’s balance sheet issues in the short term, which may include issuing stocks and stock-related securities, but a specific timeline was not provided. Reuters previously reported that the financing amount could be around $15 billion.
Ortberg also mentioned that Boeing’s leaders need to spend more time “on the factory floor, back rooms, and our engineering labs.”
In recent years, top Boeing executives, including former CEOs, former HR executives, and the current CFO, have all lived far from the company’s headquarters.
During the first conference call with analysts, Ortberg said he is currently reviewing Boeing’s business and long-term forecasts.
The company may ultimately sell some assets while reducing the workforce, focusing on developing key civil aircraft manufacturing and core defense sectors.
“I believe that doing less and doing it well is better than doing more and doing it poorly,” Ortberg said.
To end weeks-long strikes, Boeing reached an agreement with the union, including a 35% wage increase over 4 years and a signing bonus of $7,000. The union is set to vote on this agreement on Wednesday.