Boeing HQ
Today’s key story is the expectation of an IAM strike at Boeing, as even their chief that negotiated the deal expects the rank and file to reject it, as we predicted in yesterday’s column when we indicated ratification isn’t a slam dunk. Such a strike, if protracted, could have a deleterious impact on cash flow at Boeing, which is the last thing Boeing needs for the third and fourth quarters.
The executive pay raise for David Calhoun of 34% last year while the company was losing money is not lost on factory employees, who would receive 25% over four years. This also ties into reports of chaotic production in Everett by a whistleblower, as Boeing is trying to complete as many airplanes as possible prior to a strike. Both sides understand the current sentiment in the factories and are preparing appropriately.
The future of the space business for Boeing remains an unknown, but two empty spacesuits returned with the Starliner as they are incompatible with SpaceX capsules and storage space on the ISS is quite limited. The irony is obvious. But in better news, Boeing announced that it will launch a ground-breaking communications system that relies on quantum computing. If successful, that will leapfrog the latest advances by China and provide DOD with a more advanced capability with security.
Boeing delivered 40 aircraft in August, including a growing number of Boeing 737s from stored inventory to China, which is now accepting deliveries in higher quantities. 32 of the aircraft were 737 MAX models, but 9 of them were from inventory as Boeing’s production rate remains stuck in the low 20s per month, far from the 38 it had promised by year end. With the company delaying supplier output goals by 6 months, the company is tacitly admitting that it won’t reach that goal in 2024, or likely even early 2025. While that will likely avoid a later de-stocking of excess inventories, it doesn’t help suppliers return to profitability.
Links to today’s key stories follow:
- Boeing Machinists chief expects members will strike, rejecting deal he made – Seattle Times
- Boeing union leader defends pay deal as worker backlash builds – BNN Bloomberg
- When Boeing’s Starliner returned to earth, it had two empty spacesuits inside – Futurism
- Boeing to launch groundbreaking orbital quantum experiment – Payload
- Boeing delivers 40 jets in August, up 5 from a year ago – Reuters
- Boeing delays 737 MAX suppliers output goal by 6 months – AirInsight
