Boeing HQ
Today’s news about Boeing centers on a fiery speech to employees by CEO Kelly Ortberg, in which he challenged the staff to become a part of the turnaround. Several interesting quotes have been reported from the meeting, including that “Boeing can’t afford another mistake” and that staff need to stop “bitching by the water cooler.” He indicated, “We spend more time arguing among ourselves than thinking about how to outperform Airbus,” and that the turnaround can’t be completed without support from rank-and-file employees.
He rightly pointed out shortcomings in the company, including a lack of strategic focus, unnecessary expenses, and problems with the corporate culture. He also criticized bloated management levels and the process of correcting them through the 10% layoffs. He also indicated that a new airplane program is not in Boeing’s immediate future since the company can’t afford it. R&D expenses will also be cut as the company restructures itself to match market realities.
With potential tariffs and Chinese retaliation, it is a key market for Boeing. Ortberg discussed this with the President-elect and warned of the risks associated with tariffs on the company and the trade balance. “Boeing has faced great highs and lows,” Ortberg said. “We are at a low point, but we have the opportunity to move forward and improve.” The challenge now is for Ortberg and the company to execute those plans.
In other news, the Boeing layoffs continue to trickle out, with 180 more announced for the Mesa, Arizona operations. So far, we have 2,200 in WA, 50 in Oregon, 220 in South Carolina, 100 in Pennsylvania, 60 in Colorado, and 700 in Missouri, for about 3,500. With the planned cut of 17,000, the company has 80% of its massive layoff program yet to go.
Donald Trump will be president when the new Air Force One is flown. That fleet, which Trump renegotiated with Boeing during his last term, will be delivered in 2027, before the end of his term. Boeing took a bath on the fixed-price project, losing nearly $4 billion. The question of the paint scheme remains, as Trump had changed it, but Biden reversed it. If Trump insists on his paint scheme, the dark blue color may impact the heat signature and require additional rework and costs.
Air India will refurbish its owned fleet of Boeing 777s, as, like other customers, it is waiting for new Boeing airliners. This heavy overhaul process will include bringing the older planes up to the new interior standards and livery designed for the airline, enabling it to provide a consistent product. Eleven leased aircraft will remain unmodified and will likely be the first aircraft replaced as new ones arrive.
Finally, the FAA Administrator, whose term runs until 2028, is planning to meet with Boeing’s CEO in the next few weeks, as strengthening the FAA’s oversight of the company is in the works. A key question is whether regulatory scrutiny will be eased under the Trump administration. While that is unknown, it is clear that Trump and his allies have supported lighter regulations in the past. We will be watching for any changes in policy and oversight.
Links to today’s key news follow:
- Boeing CEO says the company can’t afford another mistake – The Economic Times
- Boeing’s CEO tells staff to stop ‘bitching by the water cooler’ and focus on beating Airbus – Fortune
- It looks like Donald Trump will get to fly on his cut-price Air Force One after all – Business Insider
- FAA administrator plans to meet with Boeing CEO in Seattle – Reuters
- Air India plans ‘refresh’ of its legacy long-haul B777s – The Hindu
- Boeing lays off more than 180 employees in Mesa – KTAR
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