Boeing HQ
The key news related to Boeing center about communications from Kelly Ortberg to employees and the pre-release of key 3rd quarter financial results, which were abysmal. Ortberg told employees that there will be a 10% reduction in non-union staffing, about 17,000 jobs to include executives and management ranks. He also formalized a further delay to the 777X, and announced the end of production of the 767F when the current backlog is fulfilled in 2027, both of which were essentially, faits accompli.
Reactions to the Boeing news were predictably negative, given the continued financial losses at the company. While cash flow was better than Wall Street estimates, as cash conservation measures seem to be working, earnings continue at unsustainable levels.
Other key stories include an update on the hardening positions likely to extend the IAM strike at Boeing and a federal watchdog citing inadequate oversight of Boeing by the FAA. The IAM strike is likely to be extended following no progress in new talks, and Boeing’s rescinding heath care for striking employees. The FAA, in response to its DOT Inspector General’s report includes improved oversight at Boeing that will take 3 to 5 years to implement. The relevant question that isn’t answered is how this could restrict Boeing’s aircraft output while the improvements are in process.
In legal maters, the 737 crash victim families urged a judge to overturn the deferred prosecution agreement resulting from the two fatal crashes and provide harsher penalties to the company and its key executives. A judge will decide on the fate of the agreement soon.
Finally, the 737 MAX 10 will likely be delayed until 2026, with Delta Air Lines revealing a delay to its arrangements with Boeing during a financial briefing. This corresponds to other reports indicating a more rigorous certification process with the FAA after the MAX 8 and 9 were certified with the flawed MCAS system that Boeing ‘hid’ from additional FAA scrutiny
Links to today’s key news follow:
- What happens when corporate places greater emphasis on stock buybacks rather than quality – Angry Bear
- Kelly Ortberg reverts to the Boeing Culture’s Playbook – AirInsight
- Boeing’s endless doom loop gives no respite to new CEO Ortberg – Bloomberg via Yahoo
- Boeing’s terrible, horrible, no good, very bad year – Business Insider
- Jim Cramer says ‘I’m worried’ about Boeing after plane maker lays off 17,000 employees amid safety and financial woes: ‘A very jarring series of news tonight.’ – Benzinga
- Boeing is taking its fight against striking machinists to another level – Quartz
- FAA’s ‘failing system’ of monitoring Boeing blasted by Federal watchdog – Seattle Times
- Families of Boeing 737 MAX crash victims tell judge to ditch $940 million criminal plea deal – Courthouse News
- Delta now expects delivery of first 737 MAX10s in 2026 – FlightGlobal
- Boeing’s year of turbulence, in 5 charts – Reuters
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