(FreePressBeacon.com) – Seemingly experiencing severe turbulence, besieged by an ongoing machinists’ strike and plummeting financial stability, Boeing plans to slash 17,000 jobs, a move set to echo through its already struggling operations and potentially rattle the broader aerospace industry.
CEO Kelly Ortberg announced a 10% workforce cut, impacting executives and managers alike, due to crippling financial strains and labor unrest.
This reduction comes as Boeing struggles against a massive strike of over 30,000 machinists, which has been draining resources at over $1 billion monthly.
The strike began after a decisive 95% vote against a proposed labor deal, with stalled negotiations exacerbating the situation.
Boeing filed an unfair labor practice charge against the union, alleging bad faith in negotiations, worsening tensions.
Plans to halt the 767 line and delay the 777X project to 2026 reflect an urgent focus on financial containment.
The company anticipates a staggering $5 billion in charges this quarter, with losses nearing $10 per share.
Recent history reflects Boeing’s predicament; without profits since 2018, stocks have plunged 42% this year alone, foretelling more financial struggles.
S&P Global Ratings warns of a potential downgrade to junk status should Boeing fail to address halted production and inefficient cash flow.
Recent decisions appear drastic: executives consider raising as much as $15 billion in equity, a move underscoring their desperate need for financial stability.
The instability rattles Boeing’s suppliers too, with Spirit AeroSystems contemplating cost-cutting furloughs.
Given these issues, investors are understandably dubious about Boeing’s near-term viability.
“The thing is once they get 737 production on track all their money problems are gone but they’re not willing to settle to make that happen,” said Richard Aboulafia, managing director at AeroDynamic Advisory.
“They’re firing a lot of people who could make that [stable production] happen. It seems like they’re kind of burning down their own house,” he added, cited by CNBC.
Stock values reflect widespread apprehension, trading at $151 per share compared to $251 at the outset of 2024.
Analyst Ron Epstein projects Boeing will burn through $10 billion this year, necessitating an estimated $7 billion to $8 billion stock issue next year.
Delivery numbers have dwindled, with outputs dropping from 40 planes in August to 33 in September due to the ongoing strike.
Still, Boeing’s future rests on its ability to resolve labor tensions and ensure operational efficiency, daunting tasks given decreased 737 Max production following the Alaska Airlines incident.
The coming weeks will determine whether Boeing can regain altitude in this increasingly competitive market, or if it remains mired in crisis.
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