Photo Credit: Associated Press
Boeing announced a quarterly loss of $6.2 billion on Wednesday, impacted by a nearly six-week labor strike in its commercial plane division and significant challenges affecting its defense and space operations. The embattled aviation giant, which has been under scrutiny from regulators following safety problems, reported a one percent decline in revenues to $17.8 billion. The results had been telegraphed to the market on October 11, when newly installed Chief Executive Kelly Ortberg announced the company was cutting 10 percent of its workforce.
Even before the strike, Boeing had slowed production in its commercial plane division to ensure greater attention to safety protocols after a 737 MAX flown by Alaska Airlines was forced to make an emergency landing in January when a fuselage panel blew out mid-flight. The near-catastrophe -- coming after two fatal 737 MAX crashes in 2018 and 2019 that claimed 346 lives -- put Boeing under greater regulatory oversight. The company's latest results were dented by $3 billion in one-time cost hits to its 777X and 767 programs, as well as the drag from the ongoing strike by the International Association of Machinists and Aerospace Workers (IAM).
About 33,000 IAM workers in the US Pacific Northwest walked off the job on September 13. The union is slated to vote on a new contract that could end the stoppage later Wednesday. In its defense and space business, Boeing's results were battered by $2 billion in costs for a number of programs, including the KC-46A Pegasus Air Force refueling aircraft that has featured as a problem in prior quarters.
Ortberg's mission is to turn this big ship in the right direction and restore Boeing to the leadership position that we all know and want, he said in the memo to staff. He spotlighted an end to the IAM strike as a priority, saying, we have been feverishly working to find a solution that works for the company and meets our employees needs. But once the strike ends, the company must follow improved safety protocols to ramp up operations.
