Boeing 737 Max aircraft are assembled on June 25, 2024, at the company’s Renton, Washington, plant.
Jennifer Buchanan | Reuters
boeing company Another rebuilding year is coming.
A year ago, a fuselage panel covering an unused emergency exit door exploded in mid-air on a nearly new Boeing 737 Max 9 aircraft operated by Alaska Airlines, putting the airline in the spotlight again over safety and quality concerns. focus of attention. The incident frightened everyone on board, but no one was seriously injured and the plane made a safe emergency landing in Portland, Oregon.
A preliminary report from the National Transportation Safety Board found that critical bolts were not installed before the plane left Boeing’s 737 factory in Renton, Washington, again tarnishing the image of the major U.S. exporter.
Boeing shares have fallen more than 30% in the past 12 months, while the S&P 500 has risen nearly 27%.
Boeing and S&P 500 Index Performance
Boeing’s leadership has made significant changes over the past 12 months, including replacing top executives, including a new CEO, and more rigorous training for hundreds of factory workers, many of them new.
The company on Friday outlined its progress over the past year, including the launch of random quality audits of factories. Boeing says it has “significantly” reduced manufacturing defects on the 737 airframe. spirit aerospace systems inc.It is buying back the company and reducing so-called traveling jobs, in which tasks to build planes are completed out of sequence, to reduce defects. The manufacturer also said it addressed much of the feedback employees provided during meetings with management throughout the year.
Federal Aviation Administration Administrator Michael Whitaker testifies before the House Transportation and Infrastructure Committee’s Aviation Subcommittee in the House Rayburn Office Building on September 24, 2024 in Washington, DC.
Kevin Dickey | Getty Images
The U.S. Federal Aviation Administration has tightened regulations on Boeing since the crash, limiting production of its best-selling 737 Max jet, but output remains below those levels. Federal Aviation Administration (FAA) Administrator Mike Whitaker said he would resign on January 20 and warned the company on Friday that “increased oversight will continue.”
He said Boeing’s turnaround “is not a one-year plan.”
“Boeing needs to make a fundamental cultural shift that puts safety and quality ahead of profits,” Whitaker said in a statement. “This will require continued effort and commitment from Boeing, as well as our unwavering review.”
Losses are mounting and deliveries are delayed
Boeing has not reported an annual profit since 2018.
That year saw the first of two fatal crashes involving the 737 Max, killing 346 people and marking Boeing’s worst crisis in recent years. one Both crashes involved the flight control system and the plane was grounded worldwide for nearly two years.
Boeing’s annual net income/loss.
CNBC/FactSet
There have been other quality flaws over the years, including delays in the delivery of the 737 Max, the 787 Dreamliner and the two 747s that will serve as Air Force One.
Boeing has lost more than $30 billion since 2019, and its new chief executive will be tasked with ensuring the company can increase production without the shortcomings that have slowed deliveries in the past.
In August, the company hired Kelly Ortberg, the former CEO of Rockwell Collins with thirty years of experience in the aerospace industry, as Boeing’s new CEO, replacing Dave Calho. Well (Dave Calhoun).
A few weeks after Ortberg took over, Boeing machinists went on strike for nearly two months, a work stoppage that ended after they approved a new four-year labor agreement with a 38% pay increase. Some long-term workers are trying to get Boeing to reinstate pensions, but that’s not part of the new labor deal.
Boeing CEO Kelly Ortberg visited the company’s 767 and 777/777X program facility in Everett, Washington, on August 16, 2024.
Boeing | Marianne Lockhart | Reuters
However, the strike has halted production of most of Boeing’s jets, although factories have resumed production in recent weeks. That will allow Boeing to focus on stabilizing production in the new year to get the jetliners to airlines before ramping up production further, while Airbus continues to lead Boeing in deliveries.
Boeing raised billions of dollars this fall to deal with the crisis. Ortberg also said the company would lay off 10% of its approximately 170,000 employees. Notices started being sent out late last year. Ortberg said in October that the company must focus on its core business and would review its portfolio.
“I think we’ll be in a better position … to do less and do better than to do more and do poorly,” he said on his first earnings call in October.
He toured factories in his first weeks on the job and moved to the Seattle area, where most of Boeing’s production is concentrated, and won praise from airline executives who chafed at the company’s rollback of aircraft deliveries during the post-pandemic travel boom.
Bob Jordan, CEO, All-Boeing 737 Airlines southwestHe warned in an interview last month that Boeing’s recovery was “still in the early stages” but said he believed Ortberg understood the severity of the company’s problems.
“He doesn’t see it as a Band-Aid. He sees it as a complete change for Boeing,” he said.
About The Author
