Boeing 737 MAX aircraft are seen at the company’s factory Thursday, Sept. 12, 2024, in Renton, Wash.
Stephen Brashear | AP
Boeing it will cut 10% of its workforce, which is about 17,000 people, after the company’s losses increased. machinist strike It enters its fifth week of shutdown at its aircraft factories. It will also delay the launch of the new wide-body aircraft.
The manufacturer won’t deliver the still-uncertified 777X widebody until 2026, about six years behind schedule, and will stop making commercial 767 freighters in 2027 after fulfilling its remaining orders. Kelly Ortberg said in a staff statement Friday evening.
Boeing expects to report a third-quarter loss of $9.97 a share, the company said in a surprise statement on Friday. It expects to report a pretax charge of $3 billion on its commercial aircraft unit and $2 billion on its defense business.
In preliminary financial results, Boeing said it expects operating cash flow of $1.3 billion in the third quarter.
“Our business is in a difficult position, and it is difficult to overcome the challenges we face together,” said Ortberg. “Beyond navigating our current environment, recovering our company requires tough decisions and we will need to make structural changes to remain competitive and deliver for our customers over the long term.”
The job cuts and cost cuts are Ortberg’s most dramatic moves to date, just over two months in the top job.
He was tasked with restoring Boeing after the safety and manufacturing crises, but the labor strike has been Ortberg’s biggest challenge yet. Credit-rating agencies have warned the company is at risk of losing its investment grade rating, and Boeing is burning cash in what company leaders hoped would be a full year.
S&P Global Ratings said earlier this week that Boeing is losing more than $1 billion a month as a result of the strike that began on Sept. 13, following a complete machinist strike. he threw it back the temporary agreement reached by the company with the union. Tensions have risen between the manufacturer and the union, with Boeing withdrawing a contract offer earlier this week.
On Thursday, Boeing said it had filed an unfair labor practice complaint with the National Labor Relations Board, accusing the International Association of Machinists and Aerospace Workers of bargaining in bad faith and misrepresenting the automaker’s proposals. The union accused Boeing of not negotiating with the union over a sweetened offer it argued workers would not vote on.
Ortberg said the job cuts would take place “in the coming months” after Boeing and hundreds of its suppliers struggled to find workers due to the pandemic, when demand picked up.
