Oct 24, V7N- Boeing's CEO Kelly Ortberg outlined a cautious recovery plan for the embattled company, emphasizing a "fundamental culture change" as the aerospace giant grapples with mounting losses and production setbacks. The company reported a staggering $6 billion quarterly loss, bringing its total losses for the year to nearly $8 billion. These challenges have been compounded by a protracted strike that has disrupted production of key aircraft models like the 737 MAX, 777, and 767, along with ongoing issues in its defense and space division.

Ortberg, who took over in August, has acknowledged the deep reputational damage Boeing has suffered, stating that the company must undergo significant changes to regain its former status. In a letter to employees, he called for improvements across Boeing’s operations, particularly in its defense business and its 737 MAX and 777 programs. Despite the grim financial outlook, Ortberg remains hopeful about turning the company around, likening Boeing to "a big ship that will take some time to turn."

Boeing CFO Brian West informed analysts that the company is expected to continue burning cash through the full year of 2025, with shares dipping 1.7% following the announcement. Boeing is considering raising up to $15 billion through equity offerings to strengthen its balance sheet, although specific details remain pending.

Ortberg also hinted at potential asset sales and workforce downsizing, aiming to streamline Boeing's operations and focus on core civil planemaking and defense units. He stressed the importance of doing "less and doing it better" rather than spreading the company too thin.

The ongoing strike by 33,000 workers, now over five weeks long, continues to disrupt Boeing's production schedules, delaying its goal to produce 38 units of the 737 MAX per month. Even if the strike ends, restarting production presents a fresh challenge, with supply chain disruptions and furloughed suppliers complicating the process. Ortberg emphasized that ramping up production will be more difficult than the initial shutdown.

Analysts view Ortberg’s frank acknowledgment of Boeing’s issues as a positive step, as the company has historically resisted admitting its challenges. Boeing's quarterly cash burn increased to $1.96 billion from $310 million the previous year, with revenue falling slightly to $17.84 billion. Additionally, Boeing Global Services, the company’s aftermarket business, saw a slowdown in revenue growth, further highlighting the company's struggles.

As Ortberg navigates these financial and operational difficulties, securing a new contract with striking workers and stabilizing production will be crucial to Boeing's long-term recovery.

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