Boeing HQ
Boeing has recaptured the number one position in aerospace companies by revenue, but remains well short of its pre-pandemic revenue levels. Despite a positive outlook and backlog, the industry remains plagued by supply chain issues and a shortage of experienced workers post-pandemic. We lost the generation with experience as well as shop floor leadership across the industry, and it will take another 3 years to rebuild the level of expertise to regain high productivity. Â
But other problems are looming, including the strong potential for a strike. With entry-level employees at Boeing earning $19 per hour, the company has found it difficult to compete with other nearby companies to attract and retain workers. Given that it takes two to three years to bring an employee to the level of expertise required to work independently, the company is facing a continuing labor crisis. Unfortunately, that not what Boeing needs to fix its quality problems in the short-term. Â
The IAM is ready to walk, and has already been active at Seattle-area facilities in anticipation of a labor action. This will be a major test for new CEO Kelly Ortberg as he tries to reset relations with the company’s unionized employees.  With Ortberg being an engineer, Boeing has the chance to break out of the Jack Welch school of management and focus on quality and products.
That leads to the question of whether the new CEO can turn the troubled company around. Kelly Ortberg remains in a honeymoon period, but will be facing crisis after crisis. The Starliner is a highly visible failure, the part failure that has brought 777-9 certification efforts to a halt is causing concerns at airlines. Combined with a new FAA directive to inspect 895 787 models, plus another new problem on the 737 MAX need solutions. But at the same time, leadership needs to provide the vision and direction for how the next generation of efficient and lower emission aircraft will be designed as it typically takes about 12 years from vision to implementation of a new concept, and 2035 is 11 years away.
The good news is that customers are confident, including Scott Kirby at United. But the challenges remain daunting. In other good news, used Boeing’s are seeing strong demand, from Hong Kong Airlines and Atlas Air Worldwide adding to their fleets with 787s and 747 freighters, respectively.
Finally, a NASA leadership meeting on Saturday will discuss the astronauts’ return to earth, with the potential for a decision as we approach month end. A news release that the event will be live streamed indicates the potential for a decision. Boeing needs to be prepared and react to a decision that could further erode the company’s image. Hearing from Mr. Ortberg once the choice is decided would go a long way to cultural change at Boeing.
Links to today’s key stories follow:
- Boeing returns to lead top 100 aerospace companies ranked by revenue – Flight Global
- Hong Kong Airlines eyes used Boeing 787s in long-haul reboot – Bloomberg
- Atlas Air Worldwide to add three Boeing 747-8 freighters to fleet – AJOT
- Striking is in the air at Boeing – Z
- The death of the engineer CEO: Evidence that short-termism and financialization had become ascendant – naked capitalism
- Can new CEO Ortberg turn troubled Boeing around? – Flight Global
- Leadership to discuss NASA’s Boeing crew test flight – PR Newswire
