Headline: Boeing CEO Unveils Recovery Plan Ahead of Crucial Vote
Boeing CEO Kelly Ortberg presented a plan to revitalize the aerospace manufacturer, emphasizing a significant shift in corporate culture and improvements across various sectors of the business. Ortberg highlighted the need to enhance the performance of the defense sector and key airplane programs, including the 737 MAX and 777, with a goal of stabilizing the company's overall situation.
In his first earnings call as CEO, Ortberg communicated a sense of urgency to Boeing employees, describing the company as being at a critical juncture following a series of setbacks that had shaken customer confidence and trust. He acknowledged that transforming Boeing would be a gradual process but expressed optimism about the company's potential for greatness.
The call for change comes at a time when Boeing is facing a prolonged strike involving approximately 33,000 workers, which has severely impacted the production of the 737 MAX jet. The strike has lasted over a month, leading to significant downsizing plans announced in early October.
Ortberg expressed hope that a new contract offer, set to be voted on today, would be accepted by the striking workforce, though he noted that its approval was not guaranteed.
Meanwhile, Boeing is also grappling with a production limitation imposed by the regulator on MAX aircraft due to a serious incident involving a door panel. Ortberg acknowledged that challenges would persist even if the strike ended, especially regarding restarting production lines and reactivating the supply chain, which faced recent layoffs and halted investments.
The CEO underscored the importance of cultural change, which was also addressed at a recent executive meeting. He mentioned launching a more detailed business approach to address and understand the root causes of internal issues.
Ortberg stated that before considering developing a new aircraft, Boeing must first stabilize its operations, improve program execution, optimize its portfolio, and rectify its balance sheet.
Boeing reported a significant increase in quarterly cash outflow, reaching $1.96 billion compared to $310 million in the same quarter last year. Adjusted loss per share rose to $10.44, while quarterly revenue declined 1% to $17.84 billion. Ortberg did not comment on a potential capital increase, previously suggested in reports to be around $15 billion.