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Boeing CEO Kelly Ortberg unveiled a strategic plan on Wednesday, emphasizing the need for a “fundamental culture change” at the struggling aircraft manufacturer as it reported quarterly losses of $6 billion due to a prolonged strike. The company’s losses for the year have now reached nearly $8 billion, largely attributed to the halt in production of key aircraft models like the 737 MAX, 777, and 767 following the strike.
Ortberg outlined the importance of enhancing performance in Boeing’s defense business and revitalizing its 737 MAX and 777 programs to stabilize the company, which is currently facing challenges in meeting customer expectations and rebuilding trust. Despite the setbacks, Ortberg remains optimistic about the future potential of the company, emphasizing the need for a collective effort to steer Boeing back on track.
The ongoing strike by thousands of workers has significantly impacted production, particularly affecting the 737 MAX jet, as well as the 767 and 777 planes. Ortberg expressed hope for the ratification of a new contract proposal by the striking workers, acknowledging the pivotal role this decision plays in Boeing’s recovery.
While addressing the need for a culture shift within the organization, Ortberg highlighted the importance of addressing underlying issues and fostering collaboration to drive improvements. Restarting production post-strike presents a new set of challenges, especially with lingering supply chain disruptions that need to be resolved.
Boeing’s quarterly report reflected a cash burn of $1.96 billion, compared to a positive cash flow of $310 million the previous year. Despite these financial challenges, the company’s aftermarket business, Boeing Global Services, showed resilience with a 2% revenue growth in the last quarter.
Looking ahead, Ortberg emphasized the importance of stabilizing the business, enhancing program execution, and restoring the balance sheet before considering future endeavors. While the road to recovery may be long, Ortberg’s proactive approach and commitment to change signal a promising shift in Boeing’s trajectory.
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Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.