Ryan Bergh, who has worked at the Boeing plant in Everett, Washington for 10 years, attends an International Association of Machinists and Aerospace Workers (IAM) strike at Union Hall in Seattle, Washington on October 15, 2024 Cheers at the rally.
Jason Redmond | AFP | Getty Images
boeing company Investors are bracing themselves for rough quarterly reports. Now, new CEO Kelly Ortberg has a chance to share his vision for the struggling manufacturer, from a labor deal that could end strikes to a streamlined future.
On Wednesday, more than 32,000 striking machinists will begin voting on a new, better contract proposal as he hosts his first earnings call as Boeing CEO. The results of the Labor vote are expected to be announced on Wednesday evening.
Analysts are cautiously optimistic that the new proposal, which requires a simple majority vote, could pass, ending a more than five-week shutdown that halted much of the company’s aircraft production and increased its cash burn. About $8 billion. Boeing last reported an annual profit in 2018.
During the call, investors, analysts and the public can get clues from Ortberg about what Boeing will look like in the coming years, as well as a clearer estimate of the company’s production targets for next year.
Five-year results for Boeing and the S&P 500.
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Ortberg, an aerospace veteran who previously ran Rockwell Collins, took over Boeing in early August. His difficult task was to right the ship.
The year started with a terrible mid-air start A key bolt on one of Boeing’s new 737 Max planes was not reinstalled at the factory, causing a door jam to burst. The near-catastrophe comes as the company’s leaders hope to regain the trust of regulators, years after two fatal crashes killed 346 people, the first of which occurred six years ago this month.
Instead, Boeing’s rebuilding year was pushed back to 2025, and Ortberg hinted at big changes ahead, promising employees and the public more focus on the 108-year-old company. Earlier this month, he said Boeing would cut 10% of its global workforce, or about 170,000 people.
“We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones on the road to recovery,” he told employees in an Oct. 11 message. “We also need to focus our resources performance and innovation in our core areas rather than spreading ourselves across too many efforts, which often leads to underperformance and underinvestment.”
Boeing’s new CEO Kelly Ortberg visited the company’s 767 and 777/777X project factory in Everett, Washington, USA on August 16, 2024.
Boeing | Marianne Lockhart | Reuters
When Ortberg speaks Wednesday at 10:30 a.m. ET, investors will be looking for clues about what a smaller Boeing might look like and what projects or assets might be on the chopping block.
“We believe (Boeing) is poised for further restructuring as the company looks to potentially divest parts of its portfolio and continue to focus on to strengthen its supply chain.
Raise cash
Boeing said earlier this month it would release a It lost nearly $10 a share in the third quarter and spent about $5 billion at its defense and commercial businesses, which have suffered from manufacturing defects on passenger planes, tanker problems and delays in two 747s as the new Air Force One jet.
Amid the cash hemorrhage, Boeing revealed last week that it plans to raise up to $25 billion through debt or equity or a combination of the two. Ratings agencies have warned in recent weeks that Boeing could lose its investment-grade rating and the company is planning to increase liquidity.
Repair relationships with workers and stabilize supply chains
The results of the union vote will be announced hours after the earnings call. Meanwhile, S&P Global Ratings estimates the strike is costing Boeing $1 billion a month.
Workers complained that the earlier proposal did not do enough to address the rising cost of living in the Seattle area over the past 16 years since the last contract was signed. The union said high-paying jobs at technology companies were flooding into the area at the time, driving up home prices.
Boeing 737 parked on the ground in Renton, Washington.
Leslie Josephs | CNBC
Boeing also said it remains committed to building its next-generation jetliner in the Puget Sound region, a major sticking point for workers as it moves 787 Dreamliner production to a non-union factory in South Carolina.
Acting Labor Secretary Julie Su met with both parties earlier this month to reach an agreement.
The International Association of Machinists and Aerospace Workers said: “With the help of Acting U.S. Secretary of Labor Julie Sue, we received a negotiation proposal and resolution to end the strike that is worth presenting to our members and worthy of your consideration.” 751 said in a statement on Saturday.
The aerospace industry, which relies heavily on Boeing Co.’s success, is directly calling on President Joe Biden to help end the strike.
boeing supplier spirit aerospace systems inc.The company that makes the 737’s fuselages said last week it would temporarily furlough 700 workers, but said layoffs or more furloughs were possible if the strike continued. At the same time, Boeing has cut supplier orders on several programs to save cash.
“Because the aerospace supply chain is large and interconnected, the impact of this strike extends beyond one company to countless suppliers across the country,” the Aerospace Industries Association wrote to Biden. “We urge you to continue “Work with all relevant stakeholders to seek prompt and equitable solutions as quickly as possible before the impacts become more apparent.”
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