A Boeing 737 MAX airliner photographed at the company’s factory in Renton, Washington, on September 12, 2024.
Steven Brashear AP
boeing The company plans to cut about 17,000 jobs, or 10% of its workforce, as its losses widen and a machinists’ strike that has idled aircraft factories enters its fifth week. Additionally, the long-delayed launch of a new widebody aircraft is also scheduled to be postponed.
The airline plans to deliver the yet-to-be-certified 777X widebody aircraft by 2026, about six years behind schedule. In August, the company suspended flight testing of its aircraft after structural damage was discovered on one of the planes. CEO Kelly Ortberg said in a staff memo Friday afternoon that the airline will stop manufacturing commercial 767 freighters in 2027 after fulfilling remaining orders.
“Our business is in a difficult situation, and the challenges we face together cannot be overstated,” Ortberg said. “Beyond navigating the current environment, rebuilding the company will require difficult decisions and structural changes that will enable us to remain competitive and serve our customers over the long term.”
Boeing said in a surprise release Friday that it plans to report a loss of $9.97 per share in the third quarter. Pre-tax charges are expected to be $3 billion for the commercial aircraft division and $2 billion for the defense business.
Boeing said in its preliminary financial results that it expects to have operating cash outflows of $1.3 billion in the third quarter.
The layoffs and cost-cutting are Ortberg’s most dramatic moves to date, and just over two months into his role, Ortberg has faced a number of safety and manufacturing concerns, including a near-catastrophic aerial door plug incident. He is tasked with restoring Boeing to stability after the crisis. It will explode early this year.
The machinists’ strike is a further challenge for Ortberg. Credit rating agencies have warned the company is at risk of losing its investment-grade rating, and Boeing is running out of cash in what company executives had hoped would be a turnaround year.
S&P Global Ratings said earlier this week that the strike of more than 30,000 machinists, which began on September 13 after the machinists overwhelmingly rejected a tentative agreement between Boeing and its labor union, , Boeing announced that it was losing more than $1 billion a month. Tensions between Boeing and the International Association of Machinists and Aerospace Workers have escalated, with Boeing withdrawing its offer of a new contract earlier this week.
Boeing announced Thursday that the International Association of Machinists and Aerospace Workers has filed an unfair labor practice complaint with the National Labor Relations Board, accusing it of negotiating in bad faith and misrepresenting the aircraft maker’s offer. Labor unions had accused Boeing of lax proposals, insisting that no negotiations had taken place and that workers would not vote for the proposal.
The layoffs, which Ortberg said will occur in the “coming months,” come just after Boeing and its hundreds of suppliers scrambled to fill positions as demand plummeted in the wake of the coronavirus pandemic. It will be.