American aerospace company Boeing has announced a $6 billion loss for the third quarter, focusing attention on union machinists who will soon decide whether to accept a company contract proposal or extend their strike, which has persisted for nearly six weeks.
Newly appointed CEO Kelly Ortberg shared his strategy to revive Boeing following a period marked by significant losses and reputational damage. Ortberg emphasized the necessity of a “fundamental culture change” within the company, including more hands-on leadership presence on the production floors to address and resolve issues more collaboratively.
Ortberg is advocating for a reset in management-labor relations to avoid future disconnects. He expressed optimism about the machinists voting in favor of the latest contract offer to conclude the strike.
“This is a pivotal time to restore Boeing to its legacy of excellence and industry leadership,” Ortberg stated.
Taking the helm in August, Ortberg faces his first major challenge with the ongoing strike. He has announced significant layoffs and is seeking to secure sufficient funds to stave off bankruptcy. His immediate focus is on resolving the labor dispute to resume production of the 737 Max, which is vital for the company’s cash flow.
Currently, production of new 737s is on hold due to the strike by 33,000 machinists, halting operations at assembly plants around Seattle.
“Ortberg has a lot to manage, but his priority is to conclude these negotiations,” remarked Tony Bancroft, a portfolio manager at Gabelli Funds and a Boeing investor.
Despite no profitable year since 2018, Boeing disclosed a considerable loss for the quarter ending September 30, matching analyst predictions.
Investors expect Ortberg to display calm and assertive leadership as he prepares for his first earnings call since his tenure at Rockwell Collins.
Later on Wednesday, the International Association of Machinists and Aerospace Workers will announce whether the striking workers accept Boeing’s contract offer. This includes a 35% wage increase over four years, $7,000 ratification bonuses, and maintained performance bonuses, despite Boeing’s initial push to cut these. The proposed contract does not restore the traditional pension plan but offers a minor boost in pension payouts for senior employees.
At the Boeing factory in Everett, Washington, some machinists voiced dissatisfaction with the proposed terms, emphasizing pensions and higher wage increases to combat recent high inflation.
“We’re demonstrating our unity and readiness to fight for a better deal,” said Bartley Stokes Sr., a long-standing Boeing machinist.
