Boeing to cut 17,000 jobs as losses deepen during factory strike

Boeing to cut 17,000 jobs as losses deepen during factory strike


Boeing 737 MAX airliners are pictured at the company’s factory on Thursday, Sept. 12, 2024, in Renton, Wash.

Stephen Brashear | AP

Boeing will cut 10% of its workforce, or about 17,000 people, as the company’s losses mount and a machinist strike that has idled its aircraft factories enters its fifth week. It will also delay the launch of its new wide-body airplane.

The manufacturer won’t deliver its still-uncertified 777X wide-body plane until 2026, putting it some six years behind schedule, and will stop making commercial 767 freighters in 2027 after it fulfills remaining orders, CEO Kelly Ortberg said in a staff memo on Friday afternoon.

Boeing expects to report a loss of an $9.97 a share in the third quarter, the company said in a surprise release on Friday. It expects to report a pretax charge of $3 billion in commercial airplane unit and $2 billion for its defense business.

In preliminary financial results, Boeing said it expects to have an operating cash outflow of $1.3 billion for the third quarter.

“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” Ortberg said. “Beyond navigating our current environment, restoring our company requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term.”

The job and cost cuts are the most dramatic moves to date from Ortberg, who is just over two months into his tenure in the top job.

He was tasked with restoring Boeing after safety and manufacturing crises, but the labor strike has been the biggest challenge yet for Ortberg. Credit ratings agencies have warned the company is at risk of losing its investment-grade rating, and Boeing has been burning through cash in what company leaders hoped would be a turnaround year.

S&P Global Ratings said earlier this week that Boeing is losing more than $1 billion a month from the strike, which began Sept. 13 after machinists overwhelmingly voted down a tentative agreement the company reached with the union. Tensions have been rising between the manufacturer and the union, and Boeing withdrew a contract offer earlier this week.

On Thursday, Boeing said it filed an unfair labor practice charge with the National Labor Relations Board that accused the International Association of Machinists and Aerospace Workers of negotiating in bad faith and misrepresenting the planemakers’ proposals. The union had blasted Boeing for a sweetened offer that it argued wasn’t negotiated with the union and said workers wouldn’t vote on it.

The job cuts, which Ortberg said would occur “over the coming months,” would hit just after Boeing and its hundreds of suppliers have been scrambling to staff up in the wake of the pandemic, when demand cratered.



Source

Pokémon, sports trading card boom boosts Target, Walmart ahead of holiday season
Business

Pokémon, sports trading card boom boosts Target, Walmart ahead of holiday season

Trading cards of the game “Magic” are located in a shop where a “Magic” tournament is taking place. Frank Rumpenhorst | picture alliance | Getty Images As screentime soars and technology races ahead, a low-tech pastime is back in a big way: collecting trading cards. The cardstock depicting everything from NFL standouts to Pokémon and […]

Read More
FAA lets Boeing increase 737 Max production almost two years after near-catastrophic accident
Business

FAA lets Boeing increase 737 Max production almost two years after near-catastrophic accident

Boeing 737 Max aircraft are assembled at the company’s plant in Renton, Washington, U.S. June 25, 2024. Jennifer Buchanan | Via Reuters Boeing has won regulator approval to ramp up production of its best-selling 737 Max jetliners to 42 a month, a milestone for the manufacturer nearly two years after the Federal Aviation Administration capped […]

Read More
‘The tide went out’: How a string of bad loans has bank investors hunting for hidden risks
Business

‘The tide went out’: How a string of bad loans has bank investors hunting for hidden risks

Signage outside Western Alliance Bank headquarters in Phoenix, Arizona, March 13, 2023. Caitlin O’Hara | Bloomberg | Getty Images Big banks including JPMorgan Chase and Goldman Sachs had just finished taking victory laps after a blockbuster quarter when concerns emerged from an obscure corner of Wall Street, sending a collective shiver through global finance. Regional […]

Read More