A Boeing 737 MAX aircraft lands following a FAA recertification flight at Boeing Field on June 29, 2020 in Seattle, Washington. (Photo by Stephen Brashear/Getty Images)
Boeing on Wednesday reported a quarterly loss of $6.17 billion, blaming the dim financial report partly on the ongoing factory worker strike in the Pacific Northwest.
International Association of Machinists and Aerospace Workers union members are voting today on a contract offer that, if accepted, could end the strike and allow for stalled airplane manufacturing to restart.
The losses Boeing reported were expected based on information the company already shared. Boeing’s financial report for the third quarter of the year — July to September — shows revenue of $17.8 billion and negative operating cash flow of $1.3 billion.
Prior to the strike, the company was trying to overcome problems with its safety record and had billions of dollars in debt stacking up. Earlier this month, Boeing said it would cut 10% of its workforce — about 17,000 employees company-wide — as it looked for ways to rein in costs.
In a message to employees and remarks to investors, Boeing President and CEO Kelly Ortberg on Wednesday outlined steps he sees as necessary to get the company on a better path.
“We will be focused on fundamentally changing the culture, stabilizing the business and improving program execution, while setting the foundation for the future of Boeing,” he said.
“My mission here is pretty straightforward. Turn this big ship in the right direction and restore Boeing to the leadership position that we all know and want,” added Ortberg, who took the job in August after working for two decades outside the company but in the Boeing supply chain.
Ortberg described ending the strike as “first and foremost on everybody’s mind today” and said he was “very hopeful that the package we put forward will allow our employees to come back to work so we can immediately focus on restoring the company.”
“I remain committed to getting the team back and improving our relationship, so we don’t become so disconnected in the future,” he said.
In rejecting an earlier contract offer and going on strike, aircraft machinists were seeking higher pay and restoration of a defined-benefit pension program.
The latest offer would not revive the pension, but it does include a 35% general wage increase over four years which the union says is around 40% when accounting for how pay hikes will compound. The offer also includes a one-time ratification bonus of $7,000 and boosted 401(k) contributions by the company.
About 33,000 aircraft machinists are on strike in Washington, Oregon, and California. The work stoppage has stretched 41 days and S&P Global estimated in early October that it is costing the company more than $1 billion per month, even after considering cost-saving measures taken in response.
Voting on the contract was scheduled to begin today at 8 a.m. and go until 5 p.m.
Critics of Boeing’s management are quick to highlight executive pay, including compensation for the company’s last CEO that totaled more than $32 million in 2023.
The company came under renewed scrutiny for its safety record this year when a door plug blew out of a 737 Max in January. Before that, it had faced harsh backlash over gaps in its safety culture, and hundreds of millions of dollars in fines, related to plane crashes in 2018 and 2019 that killed 346 people.