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Union members reject deal with Boeing, prolonging strike
https://www.cnn.com/2024/10/23/business ... index.html
The strike by 33,000 workers at Boeing will continue after rank-and-file union members rejected an offer from the company in a vote on Wednesday and decided to remain on the picket lines instead.
The membership of the International Association of Machinists voted 64% against the deal, the union announced late Wednesday. While that was closer than the 95% who rejected an earlier offer, it was far less than the simple majority needed to end the strike.
“Our members deserve more,” said Jon Holden, the president of the largest IAM local at Boeing and its chief negotiator. “They’ve spoken loudly, and we’re going to go back to the table to try to achieve those things.”
Boeing did not have an immediate response to a request for comment on the vote.
The offer would have raised wages for IAM members at Boeing by 35 percentage points over the four-year life of the contract, with an immediate 12% raise. It would also have paid them a $7,000 signing bonus, increased contributions to union members’ retirement accounts and provided some job security, with the promise that the company’s next commercial jet would be built at a unionized factory rather than a new, non-union plant.
But the ratification not certain. Union leadership stopped short of endorsing the offer, saying only that the offer “includes several key improvements” and that “it warrants presenting to the members and is worthy of your consideration.”
The previous tentative agreement that had been recommended by union leadership was almost unanimously rejected by rank-and-file members, sparking the start of the start of the strike on September 13.
Loss of pension a ‘sticking point’
Among the major issues for many members was the loss of a traditional pension plan. Membership narrowly gave up the pension in 2014 after the company threatened to build the 737 Max and 777X at non-union facilities. The loss of the pensions, at a time when Boeing was doing well financially, sparked deep resentment that continues to this day.
While the proposed contract achieved many of the union’s bargaining goals, and did provide for improved retirement benefits, it did not restore the traditional pension plan. Holden said Wednesday that issue is a “big sticking point for many of our members.”
“This membership has gone through a lot,” he said. “There are some deep wounds that were (created) out of some take aways and concessions, threats of job loss. Our members haven’t forgotten that.”
The rejected agreement would have raised Boeing’s labor costs by more than $1 billion annually, according to analysis from Seth Seifman, an aerospace analyst at JPMorgan Chase.
Boeing needs a deal amid rising losses
Boeing has already announced plans to cut its global workforce of 171,000 employees by about 10%, or 17,000 jobs. The cost savings from those cuts could more than offset the increased cost of the wage package, Seifman said.
But Boeing desperately needed to reach a deal to end the strike. According to an estimate from Standard & Poor’s, the strike is costing the company $1 billion a month on top of its ongoing losses.
Earlier in the day Wednesday, Boeing reported its third-quarter net loss surged to $6.2 billion from $1.6 billion a year earlier. And that period included only a limited impact on results from the strike, as the work stoppage did not start to affect aircraft deliveries, and thus company revenue, until the final days of the three-month period.
Boeing’s new CEO, Kelly Ortberg, said earlier Wednesday that the company is at a crossroads and needs a fundamental change in its culture to stabilize its business. He has said he wants to reset the relationship between management and the union.
“First and foremost on everybody’s mind today is ending the IAM strike,” Ortberg told investors in a call after the earnings report. “We have been feverishly working to find a solution that works for the company and meets employees’ needs.”
The strike is only a fraction of the problems dogging the company over the last six years, during which it has run up core operating losses of nearly $40 billion, and seen its long-term debt climb to $53 billion. It is at risk of having its credit rating downgraded to junk bond status for the first time in the company’s history.
Problems stretching back years
Boeing’s problems started with two fatal crashes of the Max in late 2018 and early 2019, which led to a 20-month grounding of the company’s best-selling jet. It was then hit by cancelled orders for new planes in 2020 when the pandemic caused a sharp plunge in demand for travel and massive losses at the world’s airlines.
In January this year, a door plug blew off an Alaska Airlines’ 737 Max jet shortly after takeoff. Although no one was seriously injured, the incident sparked numerous federal investigations and questions about the quality and safety of Boeing jets. One federal probe found that the plane had left a Boeing factory without the four bolts needed to hold the door plug in place.
The Federal Aviation Administration ramped up its oversight of the company, a step that will slow Boeing’s ability to increase production of the Max to the levels that it would need to return to profitability.
Despite recent issues, Boeing remains a key component in the US economy. It is America’s largest exporter, with an estimated annual contribution of $79 billion to the economy, supporting 1.6 million jobs directly and indirectly at 10,000 suppliers spread among all 50 states. Some of those suppliers have already been laying off workers due to the strike.
Fortunately for Boeing, it is not likely it will be forced out of business by its current financial crisis. Boeing’s place as part of a duopoly, along with European rival Airbus, essentially ensures its survival.
Boeing and Airbus are the only companies that make the full-size jets the global airline industry needs, and both companies have massive backlogs in orders. Any airline that canceled its Boeing orders and shifted to Airbus would need to wait at least four or five years to receive any aircraft from the European giant.
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More Boeing Bad News
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Boeing machinists reject new labor contract, extending strike
Boeing’s more than 32,000 machinists in the Puget Sound area of Washington, in Oregon and in other locations walked off the job Sept. 13.
https://www.nbcnews.com/business/busine ... rcna176963
Boeing machinists voted against a new labor deal that included 35% wage increases over four years, their union said Wednesday, extending a more than five-week strike that has halted most of the company’s aircraft production, which is centered in the Seattle area.
The contract’s rejection by 64% of the voters is another major setback for the company, which warned earlier Wednesday that it would continue to burn cash through 2025 and reported a $6 billion quarterly loss, its largest since 2020.
The strike is costing the company about $1 billion a month, according to S&P Global Ratings.
New CEO Kelly Ortberg had said reaching a deal with machinists was a priority in order to get the company back on track after years of safety and quality problems.
“My focus is getting everybody looking forward, get them back to work, improve that relationship,” Ortberg told CNBC’s “Squawk on the Street” earlier in the day, when asked about the strike.
Ortberg’s laid out his vision for Boeing’s future, which could includes slimming down the company to focus on core businesses. Earlier this month, he announced Boeing will cut 10% of its global workforce of 170,000 people.
Boeing’s more than 32,000 machinists in the Puget Sound area, in Oregon and in other locations walked off the job on Sept. 13 after overwhelmingly voting down a previous tentative agreement that proposed raises of 25%. The International Association of Machinists and Aerospace Workers union had originally sought wage increases of 40%. It is the machinists’ first strike since 2008.
The latest proposal, announced last Saturday, included 35% raises over four years, increased 401(k) contributions, a $7,000 bonus and other improvements.
Workers had pushed for higher pay amid a surge in living costs in the Puget Sound area. Some machinists were upset about losing their pension plan in a previous contract that they signed in 2014, but the latest proposal didn’t offer a pension.
Boeing agreed in the new contract to build its next aircraft in the Pacific Northwest, which had also been a sticking point with unionized workers after Boeing moved all of its 787 Dreamliner production to a non-union factory in South Carolina.
“We have made tremendous gains in this agreement. However, we have not achieved enough to meet our members’ demands,” said Jon Holden, president of IAM District 751, at a news conference Wednesday night. He said the union will push to go back to the negotiating table.
Boeing declined to comment on the voting results.
The labor strife is the latest in a long list of problems at Boeing, which started the year when a door plug blew out midair from a packed Boeing 737 Max 9, its best-selling plane, reigniting regulator scrutiny of the company.
The strike began as Boeing was working to ramp up production of the 737 and other aircraft.
The extended stoppage is also a challenge for the aerospace supply chain, which is fragile coming out of the pandemic, as the company’s web of suppliers had to train new workers quickly.
Spirit AeroSystems last week said it would temporarily furlough about 700 workers and that layoffs or other furloughs are possible if Boeing machinists’ strike continues.
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Boeing’s more than 32,000 machinists in the Puget Sound area of Washington, in Oregon and in other locations walked off the job Sept. 13.
https://www.nbcnews.com/business/busine ... rcna176963
Boeing machinists voted against a new labor deal that included 35% wage increases over four years, their union said Wednesday, extending a more than five-week strike that has halted most of the company’s aircraft production, which is centered in the Seattle area.
The contract’s rejection by 64% of the voters is another major setback for the company, which warned earlier Wednesday that it would continue to burn cash through 2025 and reported a $6 billion quarterly loss, its largest since 2020.
The strike is costing the company about $1 billion a month, according to S&P Global Ratings.
New CEO Kelly Ortberg had said reaching a deal with machinists was a priority in order to get the company back on track after years of safety and quality problems.
“My focus is getting everybody looking forward, get them back to work, improve that relationship,” Ortberg told CNBC’s “Squawk on the Street” earlier in the day, when asked about the strike.
Ortberg’s laid out his vision for Boeing’s future, which could includes slimming down the company to focus on core businesses. Earlier this month, he announced Boeing will cut 10% of its global workforce of 170,000 people.
Boeing’s more than 32,000 machinists in the Puget Sound area, in Oregon and in other locations walked off the job on Sept. 13 after overwhelmingly voting down a previous tentative agreement that proposed raises of 25%. The International Association of Machinists and Aerospace Workers union had originally sought wage increases of 40%. It is the machinists’ first strike since 2008.
The latest proposal, announced last Saturday, included 35% raises over four years, increased 401(k) contributions, a $7,000 bonus and other improvements.
Workers had pushed for higher pay amid a surge in living costs in the Puget Sound area. Some machinists were upset about losing their pension plan in a previous contract that they signed in 2014, but the latest proposal didn’t offer a pension.
Boeing agreed in the new contract to build its next aircraft in the Pacific Northwest, which had also been a sticking point with unionized workers after Boeing moved all of its 787 Dreamliner production to a non-union factory in South Carolina.
“We have made tremendous gains in this agreement. However, we have not achieved enough to meet our members’ demands,” said Jon Holden, president of IAM District 751, at a news conference Wednesday night. He said the union will push to go back to the negotiating table.
Boeing declined to comment on the voting results.
The labor strife is the latest in a long list of problems at Boeing, which started the year when a door plug blew out midair from a packed Boeing 737 Max 9, its best-selling plane, reigniting regulator scrutiny of the company.
The strike began as Boeing was working to ramp up production of the 737 and other aircraft.
The extended stoppage is also a challenge for the aerospace supply chain, which is fragile coming out of the pandemic, as the company’s web of suppliers had to train new workers quickly.
Spirit AeroSystems last week said it would temporarily furlough about 700 workers and that layoffs or other furloughs are possible if Boeing machinists’ strike continues.
PP
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Boeing’s machinists strike is over but the troubled aerospace giant still faces many challenges
https://apnews.com/article/boeing-contr ... 33f9a72369
SEATTLE (AP) — Factory workers at Boeing have voted to accept a contract offer and end their strike after more than seven weeks, clearing the way for the company to restart idled Pacific Northwest assembly lines.
But the strike was just one of many challenges the troubled U.S. aerospace giant faces as it works to return to profitability and regain public confidence.
Boeing’s 33,000 striking machinists disbanded their picket lines late Monday after leaders of the International Association of Machinists and Aerospace Workers district in Seattle said 59% of union members who cast ballots agreed to approve the company’s fourth formal offer, which included a 38% wage increase over four years.
Union machinists assemble the 737 Max, Boeing’s bestselling airliner, along with the 777 or “triple-seven” jet and the 767 cargo plane at factories in Renton and Everett, Washington. Resuming production will allow Boeing to generate much-needed cash, which it has been bleeding.
“Even for a company the size of Boeing, it is a life-threatening problem,” said Gautam Mukunda, lecturer at the Yale School of Management.
The union said its workers can return to work as soon as Wednesday or as late as Nov. 12. Boeing CEO Kelly Ortberg has said it might take “a couple of weeks” to resume production in part because some workers might need retraining.
As the machinists get back to work, management will have to address a host of other problems. The company needs to get on better financial footing. But while doing so, it also needs to prioritize the quality of its workmanship and its relationships with employees and suppliers, analysts said.
Boeing has been managing itself to meet short-term profit goals and “squeezing every stakeholder, squeezing every employee, every supplier to the point of failure in order in order to maximize their short-term financial performance,” Mukunda said. “That is bad enough if you run a clothing company. It is unacceptable when you are building the most complex mass-produced machines human beings have ever built.”
Above all, Boeing needs to produce more planes. When workers are back and production resumes, the company will be producing about 30 737s a month, and “they must get that number over 50. They have to do it. And the people who are going to do that are the workers on the factory floor,” Mukunda said.
Another challenge will be getting the company’s fragile supply chain running again, said Cai von Rumohr, an aviation analyst at financial services firm TD Cowen. Suppliers that were working ahead of Boeing’s schedule when the strike began may have had to lay workers off or finance operations on their own.
“There are lots of nasty questions in terms of complexities that go into revamping the supply chain,” he said.
One way Boeing could generate cash would be to sell companies that don’t fit directly in the business, such as flight information provider Jeppesen Sanderson, which it bought in 2000 for $1.5 billion, von Rumohr said.
“They’d lose some earnings but they’d get a lot of cash to reduce their debt,” he added. “They really need to get to a more stable position where they have a solid credit rating.”
Ortberg acknowledged the challenges ahead in a message to employees after they voted to end the walkout.
“There is much work ahead to return to the excellence that made Boeing an iconic company,” he said.
The average annual pay of Boeing machinists is currently $75,608 and eventually will rise to $119,309 under the new contract, according to the company. The union said the compounded value of the promised pay raise would amount to an increase of more than 43% over the life of the agreement.
Reactions were mixed even among union members who voted to accept the contract.
Although she voted “yes,” Seattle-based calibration specialist Eep Bolaño said the outcome was “most certainly not a victory.” Bolaño said she and her fellow workers made a wise but infuriating choice to accept the offer.
“We were threatened by a company that was crippled, dying, bleeding on the ground, and us as one of the biggest unions in the country couldn’t even extract two-thirds of our demands from them. This is humiliating,” she said.
For other workers like William Gardiner, a lab lead in calibration services, the revised offer was a cause for celebration.
“I’m extremely pumped over this vote,” said Gardiner, who has worked for Boeing for 13 years. “We didn’t fix everything — that’s OK. Overall, it’s a very positive contract.”
Along with the wage increase, the new contract gives each worker a $12,000 ratification bonus and retains a performance bonus the company wanted to eliminate.
President Joe Biden congratulated the machinists and Boeing for coming to an agreement that he said supports fairness in the workplace and improves workers’ ability to retire with dignity. The contract, he said, is important for Boeing’s future as “a critical part of America’s aerospace sector.”
A continuing strike would have plunged Boeing into further financial peril and uncertainty. Last month, Ortberg announced plans to lay off about 17,000 people and a stock sale to prevent the company’s credit rating from being cut to junk status.
The labor standoff — the first strike by Boeing machinists since an eight-week walkout in 2008 — was the latest setback in a volatile year for the aerospace giant.
Boeing came under several federal investigations this year after a door plug blew off a 737 Max plane during an Alaska Airlines flight in January. Federal regulators put limits on Boeing airplane production that they said would last until they felt confident about manufacturing safety at the company.
The door-plug incident renewed concerns about the safety of the 737 Max. Two of the planes had crashed less than five months apart in 2018 and 2019, killing 346 people. The CEO at the time, whose efforts to fix the company failed, announced in March that he would step down. In July, Boeing agreed to plead guilty to conspiracy to commit fraud for deceiving regulators who approved the 737 Max.
PP
https://apnews.com/article/boeing-contr ... 33f9a72369
SEATTLE (AP) — Factory workers at Boeing have voted to accept a contract offer and end their strike after more than seven weeks, clearing the way for the company to restart idled Pacific Northwest assembly lines.
But the strike was just one of many challenges the troubled U.S. aerospace giant faces as it works to return to profitability and regain public confidence.
Boeing’s 33,000 striking machinists disbanded their picket lines late Monday after leaders of the International Association of Machinists and Aerospace Workers district in Seattle said 59% of union members who cast ballots agreed to approve the company’s fourth formal offer, which included a 38% wage increase over four years.
Union machinists assemble the 737 Max, Boeing’s bestselling airliner, along with the 777 or “triple-seven” jet and the 767 cargo plane at factories in Renton and Everett, Washington. Resuming production will allow Boeing to generate much-needed cash, which it has been bleeding.
“Even for a company the size of Boeing, it is a life-threatening problem,” said Gautam Mukunda, lecturer at the Yale School of Management.
The union said its workers can return to work as soon as Wednesday or as late as Nov. 12. Boeing CEO Kelly Ortberg has said it might take “a couple of weeks” to resume production in part because some workers might need retraining.
As the machinists get back to work, management will have to address a host of other problems. The company needs to get on better financial footing. But while doing so, it also needs to prioritize the quality of its workmanship and its relationships with employees and suppliers, analysts said.
Boeing has been managing itself to meet short-term profit goals and “squeezing every stakeholder, squeezing every employee, every supplier to the point of failure in order in order to maximize their short-term financial performance,” Mukunda said. “That is bad enough if you run a clothing company. It is unacceptable when you are building the most complex mass-produced machines human beings have ever built.”
Above all, Boeing needs to produce more planes. When workers are back and production resumes, the company will be producing about 30 737s a month, and “they must get that number over 50. They have to do it. And the people who are going to do that are the workers on the factory floor,” Mukunda said.
Another challenge will be getting the company’s fragile supply chain running again, said Cai von Rumohr, an aviation analyst at financial services firm TD Cowen. Suppliers that were working ahead of Boeing’s schedule when the strike began may have had to lay workers off or finance operations on their own.
“There are lots of nasty questions in terms of complexities that go into revamping the supply chain,” he said.
One way Boeing could generate cash would be to sell companies that don’t fit directly in the business, such as flight information provider Jeppesen Sanderson, which it bought in 2000 for $1.5 billion, von Rumohr said.
“They’d lose some earnings but they’d get a lot of cash to reduce their debt,” he added. “They really need to get to a more stable position where they have a solid credit rating.”
Ortberg acknowledged the challenges ahead in a message to employees after they voted to end the walkout.
“There is much work ahead to return to the excellence that made Boeing an iconic company,” he said.
The average annual pay of Boeing machinists is currently $75,608 and eventually will rise to $119,309 under the new contract, according to the company. The union said the compounded value of the promised pay raise would amount to an increase of more than 43% over the life of the agreement.
Reactions were mixed even among union members who voted to accept the contract.
Although she voted “yes,” Seattle-based calibration specialist Eep Bolaño said the outcome was “most certainly not a victory.” Bolaño said she and her fellow workers made a wise but infuriating choice to accept the offer.
“We were threatened by a company that was crippled, dying, bleeding on the ground, and us as one of the biggest unions in the country couldn’t even extract two-thirds of our demands from them. This is humiliating,” she said.
For other workers like William Gardiner, a lab lead in calibration services, the revised offer was a cause for celebration.
“I’m extremely pumped over this vote,” said Gardiner, who has worked for Boeing for 13 years. “We didn’t fix everything — that’s OK. Overall, it’s a very positive contract.”
Along with the wage increase, the new contract gives each worker a $12,000 ratification bonus and retains a performance bonus the company wanted to eliminate.
President Joe Biden congratulated the machinists and Boeing for coming to an agreement that he said supports fairness in the workplace and improves workers’ ability to retire with dignity. The contract, he said, is important for Boeing’s future as “a critical part of America’s aerospace sector.”
A continuing strike would have plunged Boeing into further financial peril and uncertainty. Last month, Ortberg announced plans to lay off about 17,000 people and a stock sale to prevent the company’s credit rating from being cut to junk status.
The labor standoff — the first strike by Boeing machinists since an eight-week walkout in 2008 — was the latest setback in a volatile year for the aerospace giant.
Boeing came under several federal investigations this year after a door plug blew off a 737 Max plane during an Alaska Airlines flight in January. Federal regulators put limits on Boeing airplane production that they said would last until they felt confident about manufacturing safety at the company.
The door-plug incident renewed concerns about the safety of the 737 Max. Two of the planes had crashed less than five months apart in 2018 and 2019, killing 346 people. The CEO at the time, whose efforts to fix the company failed, announced in March that he would step down. In July, Boeing agreed to plead guilty to conspiracy to commit fraud for deceiving regulators who approved the 737 Max.
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Re: More Boeing Bad News
Boeing got the easy part done. Now comes the tougher, existential problems
https://www.cnn.com/2024/11/12/business ... index.html
Boeing’s most immediate problem – an eight-week strike by 33,000 workers – is over. But its more serious problems – ongoing massive losses, quality and safety problems – are as bad as ever, and could even get worse.
The last of those strikers return to work on Tuesday, but it will take weeks before airplanes start rolling off the production lines again, the company said Tuesday. It’ll be even longer before everything is back to pre-strike production levels.
“This isn’t something that there’s just a light switch that flips,” Boeing CEO Kelly Ortberg warned investors last month, even before machinists union members agreed to a deal. “We’re probably going to have a little bumpy return.”
And as nearly $40 billion in losses since 2019 have demonstrated, the pre-strike situation at Boeing was far from rosy.
Boeing’s outlook is still very troubled. Even with years of problems, it remains crucial to the American manufacturing base and economy. So its monumental challenges are important for far more than just one company.
Renewed problems in China
Among the most serious problems Boeing faces is President-elect Donald Trump’s promise to impose large tariffs on imports from China.
Boeing is America’s largest exporter, and therefore very exposed to any trade war. China is the largest global market for new aircraft purchases, with Boeing forecasting that China’s fleet of commercial jets will double in the next 20 years.
The aircraft maker has been down this road before. The company’s sales to China ground to a near-halt in 2017 as trade tensions between the two countries escalated during Trump’s first term. Orders from Chinese buyers fell from 64 in 2016 to 51 in 2017 to zero in both 2018 and 2019. A similar drop could occur if a new trade war breaks out.
“We really don’t know what Trump will do with Chinese tariffs,” said Richard Aboulafia, managing director at AeroDynamic Advisory, an industry consultant. “But if he slaps 60% tariffs on all Chinese goods, the quickest way for China to retaliate is to switch to (Boeing rival) Airbus for 100% of its needs.”
Boeing has seen a modest resumption of sales and deliveries to China recently, with 20 orders in 2021 and 15 in 2023. So far this year it has 53 deliveries to China, up from 35 in the four previous years combined.
Boeing declined to comment on the impact the election could have on its sales in China.
Increased oversight
Boeing has been under increased scrutiny from the Federal Aviation Administration since a door plug blew off of an Alaska Airlines flight in January, which has limited how many planes it is allowed to produce.
Even if Boeing ramps up production back to pre-January levels, the company still wouldn’t be profitable.
To increase production, it needs to improve quality to win the FAA’s approval. Boeing has already signaled it expects to lose money throughout 2025.
In addition, it has agreed to operate under the supervision of a court-appointed monitor overseeing safety and quality. That is part of a plea agreement that it reached to settle criminal charges that it deceived the FAA back during the certification of the Max.
“Generally, these sort of monitors make things harder,” said Aboulafia. “There needs to be a full accounting for everything they do.”
Need for new planes
And there’s yet more mess Boeing needs to sort out.
FAA approval for two new versions of the 737 Max, the smaller Max-7 and the larger Max-10, ground to a halt after Alaska Air incident.
Boeing has also continually pushed back the expected launch of its critical new widebody jet, the 777X. The plane, originally promised to customers by 2020, now won’t have its first delivery until at least 2026, after more problems during test flights.
And it needs much more than just newer versions of existing planes like the 737 Max and 777. It needs a totally new plane model to compete with the Airbus 321neo. Boeing has been talking about developing a longer-range, midsize plane for more than a decade, but those efforts were derailed by the problems of the last five years.
Ortberg told investors last month that Boeing needs to reduce its portfolio and repair its balance sheet so that Boeing has “a path to the next commercial aircraft.”
The good news for Boeing is it is in little danger of going out of business, despite its many problems. It is one of only two manufacturers, along with rival Airbus, that makes the full-size commercial jets needed by the world’s airline industry.
And Airbus has a backlog of orders stretching back years, as does Boeing, so airline customers can not easily switch orders from one to the other. Even as the Boeing machinists strike continued, the company received orders for 63 jets in October; buyers know the strike will be a distant memory by the time they are delivered.
But that doesn’t mean Boeing is in the clear.
“It could end up a permanent distant second, with conditions put in place for the emergence of a third provider,” said Aboulafia.
PP
https://www.cnn.com/2024/11/12/business ... index.html
Boeing’s most immediate problem – an eight-week strike by 33,000 workers – is over. But its more serious problems – ongoing massive losses, quality and safety problems – are as bad as ever, and could even get worse.
The last of those strikers return to work on Tuesday, but it will take weeks before airplanes start rolling off the production lines again, the company said Tuesday. It’ll be even longer before everything is back to pre-strike production levels.
“This isn’t something that there’s just a light switch that flips,” Boeing CEO Kelly Ortberg warned investors last month, even before machinists union members agreed to a deal. “We’re probably going to have a little bumpy return.”
And as nearly $40 billion in losses since 2019 have demonstrated, the pre-strike situation at Boeing was far from rosy.
Boeing’s outlook is still very troubled. Even with years of problems, it remains crucial to the American manufacturing base and economy. So its monumental challenges are important for far more than just one company.
Renewed problems in China
Among the most serious problems Boeing faces is President-elect Donald Trump’s promise to impose large tariffs on imports from China.
Boeing is America’s largest exporter, and therefore very exposed to any trade war. China is the largest global market for new aircraft purchases, with Boeing forecasting that China’s fleet of commercial jets will double in the next 20 years.
The aircraft maker has been down this road before. The company’s sales to China ground to a near-halt in 2017 as trade tensions between the two countries escalated during Trump’s first term. Orders from Chinese buyers fell from 64 in 2016 to 51 in 2017 to zero in both 2018 and 2019. A similar drop could occur if a new trade war breaks out.
“We really don’t know what Trump will do with Chinese tariffs,” said Richard Aboulafia, managing director at AeroDynamic Advisory, an industry consultant. “But if he slaps 60% tariffs on all Chinese goods, the quickest way for China to retaliate is to switch to (Boeing rival) Airbus for 100% of its needs.”
Boeing has seen a modest resumption of sales and deliveries to China recently, with 20 orders in 2021 and 15 in 2023. So far this year it has 53 deliveries to China, up from 35 in the four previous years combined.
Boeing declined to comment on the impact the election could have on its sales in China.
Increased oversight
Boeing has been under increased scrutiny from the Federal Aviation Administration since a door plug blew off of an Alaska Airlines flight in January, which has limited how many planes it is allowed to produce.
Even if Boeing ramps up production back to pre-January levels, the company still wouldn’t be profitable.
To increase production, it needs to improve quality to win the FAA’s approval. Boeing has already signaled it expects to lose money throughout 2025.
In addition, it has agreed to operate under the supervision of a court-appointed monitor overseeing safety and quality. That is part of a plea agreement that it reached to settle criminal charges that it deceived the FAA back during the certification of the Max.
“Generally, these sort of monitors make things harder,” said Aboulafia. “There needs to be a full accounting for everything they do.”
Need for new planes
And there’s yet more mess Boeing needs to sort out.
FAA approval for two new versions of the 737 Max, the smaller Max-7 and the larger Max-10, ground to a halt after Alaska Air incident.
Boeing has also continually pushed back the expected launch of its critical new widebody jet, the 777X. The plane, originally promised to customers by 2020, now won’t have its first delivery until at least 2026, after more problems during test flights.
And it needs much more than just newer versions of existing planes like the 737 Max and 777. It needs a totally new plane model to compete with the Airbus 321neo. Boeing has been talking about developing a longer-range, midsize plane for more than a decade, but those efforts were derailed by the problems of the last five years.
Ortberg told investors last month that Boeing needs to reduce its portfolio and repair its balance sheet so that Boeing has “a path to the next commercial aircraft.”
The good news for Boeing is it is in little danger of going out of business, despite its many problems. It is one of only two manufacturers, along with rival Airbus, that makes the full-size commercial jets needed by the world’s airline industry.
And Airbus has a backlog of orders stretching back years, as does Boeing, so airline customers can not easily switch orders from one to the other. Even as the Boeing machinists strike continued, the company received orders for 63 jets in October; buyers know the strike will be a distant memory by the time they are delivered.
But that doesn’t mean Boeing is in the clear.
“It could end up a permanent distant second, with conditions put in place for the emergence of a third provider,” said Aboulafia.
PP
Re: More Boeing Bad News
Boeing delivers layoff notices to 17,000 workers amid financial struggles
https://www.yahoo.com/finance/news/boei ... dFlTqHRyF9
Nov. 13 (UPI) -- Boeing started issuing layoff notices Wednesday to 17,000 employees to cut 10% of its workforce in an effort to shore up the aerospace giant's shaky finances.
The layoff notifications, which will be handed out through Friday, are being issued the same week 33,000 Boeing machinists in the Seattle area returned to work following their seven-week strike.
"Our business is in a difficult position, and it is hard to overstate the challenges we face together," Boeing chief executive officer Kelly Ortberg told staff in a memo last month as he announced the cuts.
"Restoring our company requires tough decisions, and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term," Ortberg added.
The layoffs will impact executives, managers and employees, but workers who build the aircraft are not expected to be cut. Those who receive notifications are expected to leave the company by Jan. 17.
"We must reset our workforce levels to align with our financial reality and to a more focused set of priorities," Ortberg said, adding that Boeing will "maintain our steadfast focus on safety, quality and delivering for our customers."
In addition to the layoffs, Boeing will delay its first delivery of the 777X to 2026 and conclude production of its 767 Freighters in 2027. Production of the KC-46A Tanker will continue.
The cuts at Boeing follow billions of lost revenue over the past five years and a number of crises, including two 737 Max 8 crashes over a six-month period with the first occurring in October 2018, which was the last year Boeing turned a profit. This year, a door panel blew off a 737 Max jet mid-flight, as regulators investigated Boeing's safety protocols and Max production stalled with the machinists' strike.
"We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones on the path to recovery," Ortberg said.
"We also need to focus our resources on performing and innovating in the areas that are core to who we are, rather than spreading ourselves across too many efforts that can often result in underperformance and underinvestment."
PP
https://www.yahoo.com/finance/news/boei ... dFlTqHRyF9
Nov. 13 (UPI) -- Boeing started issuing layoff notices Wednesday to 17,000 employees to cut 10% of its workforce in an effort to shore up the aerospace giant's shaky finances.
The layoff notifications, which will be handed out through Friday, are being issued the same week 33,000 Boeing machinists in the Seattle area returned to work following their seven-week strike.
"Our business is in a difficult position, and it is hard to overstate the challenges we face together," Boeing chief executive officer Kelly Ortberg told staff in a memo last month as he announced the cuts.
"Restoring our company requires tough decisions, and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term," Ortberg added.
The layoffs will impact executives, managers and employees, but workers who build the aircraft are not expected to be cut. Those who receive notifications are expected to leave the company by Jan. 17.
"We must reset our workforce levels to align with our financial reality and to a more focused set of priorities," Ortberg said, adding that Boeing will "maintain our steadfast focus on safety, quality and delivering for our customers."
In addition to the layoffs, Boeing will delay its first delivery of the 777X to 2026 and conclude production of its 767 Freighters in 2027. Production of the KC-46A Tanker will continue.
The cuts at Boeing follow billions of lost revenue over the past five years and a number of crises, including two 737 Max 8 crashes over a six-month period with the first occurring in October 2018, which was the last year Boeing turned a profit. This year, a door panel blew off a 737 Max jet mid-flight, as regulators investigated Boeing's safety protocols and Max production stalled with the machinists' strike.
"We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones on the path to recovery," Ortberg said.
"We also need to focus our resources on performing and innovating in the areas that are core to who we are, rather than spreading ourselves across too many efforts that can often result in underperformance and underinvestment."
PP
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Re: More Boeing Bad News
17000 managers and executives ? Unbelievable.
Re: More Boeing Bad News
Court rejects Boeing plea deal tied to 737 Max crashes
The court gave Boeing and the Justice Department 30 days to decide how to proceed, according to a court document filed Thursday.
https://www.nbcnews.com/business/busine ... rcna183059
A federal judge rejected Boeing’s plea deal tied to a criminal fraud charge stemming from fatal crashes of its 737 Max aircraft.
U.S. District Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas expressed concern in his decision on Thursday that a government-appointed monitor, a condition of the plea deal, would include diversity, equity and inclusion policiies.
He wrote that “the Court is not convinced in light of the foregoing that the Government will not choose a monitor without race-based considerations and thus will not act in a nondiscriminatory manner. In a case of this magnitude, it is in the utmost interest of justice that the public is confident this monitor selection is done based solely on competency.”
In October, O’Connor ordered Boeing and the Justice Department to provide details on diversity, equity and inclusion policies when the monitor would be selected.
The court gave Boeing and the Justice Department 30 days to decide how to proceed, according to a court document filed Thursday.
In July, Boeing agreed to plead guilty to a criminal charge of conspiring to defraud the U.S. government by misleading regulators about its inclusion of a flight-control system on the Max that was later implicated in the two crashes — a Lion Air flight in October 2018 and an Ethiopian Airlines flight in March 2019. All 346 people on the flights were killed.
Boeing and the Justice Department didn’t immediately comment.
Victims’ family members had taken issue with a government-appointed monitor as a condition of the plea deal and sought to provide more input. They called it a “sweetheart deal.”
Erin Applebaum, an attorney representing one of the victim’s family members applauded the deal. “We anticipate a significant renegotiation of the plea deal that incorporates terms truly commensurate with the gravity of Boeing’s crimes,” Applebaum said in a statement. “It’s time for the DOJ to end its lenient treatment of Boeing and demand real accountability.”
The deal was set to allow Boeing to avoid a trial just as it was trying to get the company back on solid footing after a door burst off of a flight in midair at the start of the year, reigniting a safety crisis at the manufacturer.
The new plea deal arose after the Justice Department said in May that Boeing violated a previous plea agreement, which was set to expire days after the door plug blew off the 737 Max 9 on Jan. 5. O’Connor said in his decision on Thursday that it “is not clear what all Boeing has done to breach the Deferred Prosecution Agreement.”
Under the new plea agreement, Boeing was set to face a fine of up to $487.2 million. However, the Justice Department recommended that the court credit Boeing with half that amount it paid under a previous agreement, resulting in a fine of $243.6 million.
PP
The court gave Boeing and the Justice Department 30 days to decide how to proceed, according to a court document filed Thursday.
https://www.nbcnews.com/business/busine ... rcna183059
A federal judge rejected Boeing’s plea deal tied to a criminal fraud charge stemming from fatal crashes of its 737 Max aircraft.
U.S. District Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas expressed concern in his decision on Thursday that a government-appointed monitor, a condition of the plea deal, would include diversity, equity and inclusion policiies.
He wrote that “the Court is not convinced in light of the foregoing that the Government will not choose a monitor without race-based considerations and thus will not act in a nondiscriminatory manner. In a case of this magnitude, it is in the utmost interest of justice that the public is confident this monitor selection is done based solely on competency.”
In October, O’Connor ordered Boeing and the Justice Department to provide details on diversity, equity and inclusion policies when the monitor would be selected.
The court gave Boeing and the Justice Department 30 days to decide how to proceed, according to a court document filed Thursday.
In July, Boeing agreed to plead guilty to a criminal charge of conspiring to defraud the U.S. government by misleading regulators about its inclusion of a flight-control system on the Max that was later implicated in the two crashes — a Lion Air flight in October 2018 and an Ethiopian Airlines flight in March 2019. All 346 people on the flights were killed.
Boeing and the Justice Department didn’t immediately comment.
Victims’ family members had taken issue with a government-appointed monitor as a condition of the plea deal and sought to provide more input. They called it a “sweetheart deal.”
Erin Applebaum, an attorney representing one of the victim’s family members applauded the deal. “We anticipate a significant renegotiation of the plea deal that incorporates terms truly commensurate with the gravity of Boeing’s crimes,” Applebaum said in a statement. “It’s time for the DOJ to end its lenient treatment of Boeing and demand real accountability.”
The deal was set to allow Boeing to avoid a trial just as it was trying to get the company back on solid footing after a door burst off of a flight in midair at the start of the year, reigniting a safety crisis at the manufacturer.
The new plea deal arose after the Justice Department said in May that Boeing violated a previous plea agreement, which was set to expire days after the door plug blew off the 737 Max 9 on Jan. 5. O’Connor said in his decision on Thursday that it “is not clear what all Boeing has done to breach the Deferred Prosecution Agreement.”
Under the new plea agreement, Boeing was set to face a fine of up to $487.2 million. However, the Justice Department recommended that the court credit Boeing with half that amount it paid under a previous agreement, resulting in a fine of $243.6 million.
PP
Re: More Boeing Bad News
Boeing whistleblower sounds alarm over safety at satellite factory: "They're not gonna listen to me until somebody dies"
https://www.cbsnews.com/news/boeing-whi ... e-factory/
Whether it's providing internet to storm-ravaged communities or supporting American troops at war, Craig Garriott has long believed the satellites he builds for Boeing helped protect lives.
Now, Garriott, 53, says, it's the lives of hundreds of technicians at the Boeing facility where he has worked for nearly three decades that need protecting from company management.
"They've taken the focus off quality, the focus off the people on the floor, and they've put it completely on profit and going fast," Garriott said in an exclusive interview with CBS News senior transportation correspondent Kris Van Cleave. "I'm afraid with Boeing in the hands that it's in now down here, they're not gonna listen to me until somebody dies."
He said efforts by Boeing executives to boost production at the company's Los Angeles-area military and commercial satellite plant have led to a "toxic culture" that has put workers there in danger. Garriott recalled how a four-ton satellite estimated to be worth hundreds of millions of dollars crashed to the factory floor after it wasn't properly secured — an incident so catastrophic he compared it to "a plane falling out of the sky."
"One person was underneath that satellite and they barely got out," said Garriott, who also represents 600 hourly workers as the head of the local carpenters union. "It's the worst thing that can possibly happen on a site."
A Boeing spokesperson did not respond to specific questions about the incident. In a statement to CBS News, the spokesperson said, "Boeing is dedicated to the safety of its employees, and all employees are empowered and encouraged to report any safety concerns."
Garriott's allegations echo concerns raised by multiple whistleblowers who have worked on Boeing's commercial airliners, including the troubled 737 MAX. And they add to struggles already facing Boeing's space division.
The most high-profile Boeing space failure occurred in September, when the company's Starliner spacecraft experienced a cascade of technical troubles on a manned test flight to the International Space Station. NASA considered the return flight too risky, and sent it back to Earth without the two astronauts it had planned to shuttle home. Those astronauts will instead travel back next year in a capsule built by rival SpaceX and its CEO Elon Musk.
Tapped by President-elect Trump to lead a new Department of Government Efficiency, Musk is set to potentially wield enormous influence over lucrative space and defense contracts, which could put Boeing at a further disadvantage.
Boeing, the company that helped put a man on the moon, is now exploring a new course — indicating it may sell off parts of its space business, according to a recent report in the Wall Street Journal. During Boeing's October earnings call, new CEO Kelly Ortberg suggested he was reevaluating the company's portfolio.
"We're better off doing less and doing it well than doing more and not doing it well," Ortberg said.
The Boeing spokesperson did not respond to questions about how the company views competition from SpaceX or about steps it is taking to prepare for the incoming administration.
Garriott estimates he's raised 300-400 safety violations over past year
Acquired by Boeing in 2000, the satellite manufacturing facility has long been considered one of Boeing's more stable business units. It relies in part on a union workforce that Garriott said is responsible for constructing and testing satellites and their component parts.
"This is perhaps the most technical group of hourly people that you'll probably find on this planet," said Garriott, who estimated he's raised between 300 and 400 safety violations over the past year. Those complaints, he said, range from obstructed fire extinguishers and fire alarms to concerns over heavy machinery blocking exits and trapping workers in certain parts of the factory.
In October, union workers filed a complaint with the Occupational Health and Safety Administration that, according to Garriott, highlighted unsafe conditions on the factory floor.
Another technician at the facility, who spoke to CBS News on the condition he remain anonymous to protect his job, said safety had become "an afterthought" and quality had "degraded" over the past five to six years.
"You speak up now, you're a troublemaker"
Garriott sued Boeing in April alleging company management retaliated against him for raising safety issues. He said he's been harassed by leadership at the facility and has been the target of dozens of corporate investigations that he says turned up nothing and were only meant to intimidate him.
"When I first started at Boeing, the guys that spoke up and said, 'Hey, this doesn't feel right,' those guys were revered," Garriott said. "You speak up now, you're a troublemaker."
In a statement, Boeing said it investigated Garriott's claims and disputed the allegations he made in his lawsuit.
'We have strict policies prohibiting retaliation toward employees who raise concerns, and Boeing did not retaliate against Mr. Garriott," the Boeing spokesperson said.
Garriott is the latest whistleblower claiming the company retaliated against him after raising safety concerns. John Barnett, a former quality manager at the company's 787 Dreamliner factory, died by suicide in March while in Charleston, South Carolina, giving testimony in his whistleblower retaliation case.
Barnett's mother, Vicky Stokes, told CBS News in April she holds the aircraft manufacturing giant responsible for the grinding treatment that ultimately left her son despondent.
"If this hadn't gone on so long, I'd still have my son, and my sons would have their brother and we wouldn't be sitting here. So in that respect, I do," Stokes said when asked if she places some of the blame for her son's death on Boeing.
In June, former Boeing CEO Dave Calhoun told lawmakers on the Senate investigations subcommittee that Boeing's culture is "far from perfect," but said the company is "committed to making sure every employee feels empowered to speak up if there is a problem." He also said Boeing is working on improving "transparency and accountability, while elevating employee engagement."
Garriott said although his family fears he will endure further reprisals from Boeing, he's now speaking out publicly in an effort to improve conditions for workers he said he took an oath as union head to protect.
"I'm not gonna stop till I know that Boeing understands that these people mean something, they matter," Garriott said, urging company executives to open up a dialogue with workers on the factory floor. "Make 'em feel like they matter. Make 'em feel like their safety matters."
PP
https://www.cbsnews.com/news/boeing-whi ... e-factory/
Whether it's providing internet to storm-ravaged communities or supporting American troops at war, Craig Garriott has long believed the satellites he builds for Boeing helped protect lives.
Now, Garriott, 53, says, it's the lives of hundreds of technicians at the Boeing facility where he has worked for nearly three decades that need protecting from company management.
"They've taken the focus off quality, the focus off the people on the floor, and they've put it completely on profit and going fast," Garriott said in an exclusive interview with CBS News senior transportation correspondent Kris Van Cleave. "I'm afraid with Boeing in the hands that it's in now down here, they're not gonna listen to me until somebody dies."
He said efforts by Boeing executives to boost production at the company's Los Angeles-area military and commercial satellite plant have led to a "toxic culture" that has put workers there in danger. Garriott recalled how a four-ton satellite estimated to be worth hundreds of millions of dollars crashed to the factory floor after it wasn't properly secured — an incident so catastrophic he compared it to "a plane falling out of the sky."
"One person was underneath that satellite and they barely got out," said Garriott, who also represents 600 hourly workers as the head of the local carpenters union. "It's the worst thing that can possibly happen on a site."
A Boeing spokesperson did not respond to specific questions about the incident. In a statement to CBS News, the spokesperson said, "Boeing is dedicated to the safety of its employees, and all employees are empowered and encouraged to report any safety concerns."
Garriott's allegations echo concerns raised by multiple whistleblowers who have worked on Boeing's commercial airliners, including the troubled 737 MAX. And they add to struggles already facing Boeing's space division.
The most high-profile Boeing space failure occurred in September, when the company's Starliner spacecraft experienced a cascade of technical troubles on a manned test flight to the International Space Station. NASA considered the return flight too risky, and sent it back to Earth without the two astronauts it had planned to shuttle home. Those astronauts will instead travel back next year in a capsule built by rival SpaceX and its CEO Elon Musk.
Tapped by President-elect Trump to lead a new Department of Government Efficiency, Musk is set to potentially wield enormous influence over lucrative space and defense contracts, which could put Boeing at a further disadvantage.
Boeing, the company that helped put a man on the moon, is now exploring a new course — indicating it may sell off parts of its space business, according to a recent report in the Wall Street Journal. During Boeing's October earnings call, new CEO Kelly Ortberg suggested he was reevaluating the company's portfolio.
"We're better off doing less and doing it well than doing more and not doing it well," Ortberg said.
The Boeing spokesperson did not respond to questions about how the company views competition from SpaceX or about steps it is taking to prepare for the incoming administration.
Garriott estimates he's raised 300-400 safety violations over past year
Acquired by Boeing in 2000, the satellite manufacturing facility has long been considered one of Boeing's more stable business units. It relies in part on a union workforce that Garriott said is responsible for constructing and testing satellites and their component parts.
"This is perhaps the most technical group of hourly people that you'll probably find on this planet," said Garriott, who estimated he's raised between 300 and 400 safety violations over the past year. Those complaints, he said, range from obstructed fire extinguishers and fire alarms to concerns over heavy machinery blocking exits and trapping workers in certain parts of the factory.
In October, union workers filed a complaint with the Occupational Health and Safety Administration that, according to Garriott, highlighted unsafe conditions on the factory floor.
Another technician at the facility, who spoke to CBS News on the condition he remain anonymous to protect his job, said safety had become "an afterthought" and quality had "degraded" over the past five to six years.
"You speak up now, you're a troublemaker"
Garriott sued Boeing in April alleging company management retaliated against him for raising safety issues. He said he's been harassed by leadership at the facility and has been the target of dozens of corporate investigations that he says turned up nothing and were only meant to intimidate him.
"When I first started at Boeing, the guys that spoke up and said, 'Hey, this doesn't feel right,' those guys were revered," Garriott said. "You speak up now, you're a troublemaker."
In a statement, Boeing said it investigated Garriott's claims and disputed the allegations he made in his lawsuit.
'We have strict policies prohibiting retaliation toward employees who raise concerns, and Boeing did not retaliate against Mr. Garriott," the Boeing spokesperson said.
Garriott is the latest whistleblower claiming the company retaliated against him after raising safety concerns. John Barnett, a former quality manager at the company's 787 Dreamliner factory, died by suicide in March while in Charleston, South Carolina, giving testimony in his whistleblower retaliation case.
Barnett's mother, Vicky Stokes, told CBS News in April she holds the aircraft manufacturing giant responsible for the grinding treatment that ultimately left her son despondent.
"If this hadn't gone on so long, I'd still have my son, and my sons would have their brother and we wouldn't be sitting here. So in that respect, I do," Stokes said when asked if she places some of the blame for her son's death on Boeing.
In June, former Boeing CEO Dave Calhoun told lawmakers on the Senate investigations subcommittee that Boeing's culture is "far from perfect," but said the company is "committed to making sure every employee feels empowered to speak up if there is a problem." He also said Boeing is working on improving "transparency and accountability, while elevating employee engagement."
Garriott said although his family fears he will endure further reprisals from Boeing, he's now speaking out publicly in an effort to improve conditions for workers he said he took an oath as union head to protect.
"I'm not gonna stop till I know that Boeing understands that these people mean something, they matter," Garriott said, urging company executives to open up a dialogue with workers on the factory floor. "Make 'em feel like they matter. Make 'em feel like their safety matters."
PP
Re: More Boeing Bad News
Boeing Quality Investigator Claims Faulty Parts Have Been Used "Repeatedly" To Produce Planes Faster
https://simpleflying.com/boeing-quality ... 7101120838
More revelations from current and former Boeing employees have surfaced after a recent report by CBS’ 60 Minutes once again brought attention back to the US plane maker’s troubled production processes. The Boeing workers told the media outlet that Boeing used faulty or nonconforming parts to keep the assembly line moving and meet delivery targets.
Russian roulette
In his first-ever television interview, Sam Mohawk of Boeing’s Renton Factory said on CBS’ 60 Minutes that Boeing used parts that were written off as faulty or nonconforming on airplanes to keep the production line moving.
Part of Mohawk’s job is to maintain the quality of aircraft production and track all the faulty parts that are stored separately to ensure they don’t end up on a plane. However, Mohawk said he found out that some Boeing employees breached protocols and used faulty parts on aircraft when the quality inspection team wasn’t looking.
According to Mohawk, this was not just limited to nuts and bolts, but even rudders. He added that 42 faulty or nonconforming rudders went missing that would likely not last the 30 years of the standard expected lifespan of a jetliner. He added,
“I think without a proper investigation it could-- it could lead to a catastrophic event. It might not happen within the first year, but down the road they're not gonna last the lifetime that they're expected to last. It's like Russian roulette, you know? You don't know if it's gonna go down or not.”
Competing for parts
Former Boeing employee Merle Meyers was also inspired to reveal some of Boeing’s production practices after the death of another Boeing whistleblower, John Barnett. Meyers’ career at Boeing spanned three decades, and he began working as a parts inspector.
He told CBS that he first became concerned in 2015 after finding out that landing gear axles for the 787 Dreamliner aircraft that had been written off as defective were brought back to the factory. He added that they were corroded beyond repair and spray-painted red. Boeing denied ever using the defective axles on its airplanes.
Meyers goes on to add that such practices of parts unfit for use eventually making their way to airplanes had gone on for more than a decade. Sometimes, chemicals were used to clean them up before they were placed on airplanes.
He also added that managers would fight for aircraft parts, good or faulty, and compete with each other to complete the production of the aircraft they were assigned.
Plenty to clean up
Boeing has been under tremendous pressure both from regulations and airlines to improve its production quality as it sits on a huge backlog of orders. Several whistleblowers have expressed their concerns over the oversights at Boeing’s factories, forcing the plane maker to take steps and work on these issues.
Boeing has also made changes in its top management, including hiring a new CEO, who has been looking at ways to get the company back on track. The entire CBS interview can be accessed here. Simple Flying contacted Boeing for comments and received the following response,
"The current and former Boeing employees interviewed by 60 Minutes previously shared their concerns with the company. We listened and carefully evaluated their claims, and we do not doubt their sincerity.
"Some of their feedback contributed to improvements in our factory processes, and other issues they raised were not accurate. But to be clear: Based on investigations over several years, none of their claims were found to affect airplane safety."
PP
https://simpleflying.com/boeing-quality ... 7101120838
More revelations from current and former Boeing employees have surfaced after a recent report by CBS’ 60 Minutes once again brought attention back to the US plane maker’s troubled production processes. The Boeing workers told the media outlet that Boeing used faulty or nonconforming parts to keep the assembly line moving and meet delivery targets.
Russian roulette
In his first-ever television interview, Sam Mohawk of Boeing’s Renton Factory said on CBS’ 60 Minutes that Boeing used parts that were written off as faulty or nonconforming on airplanes to keep the production line moving.
Part of Mohawk’s job is to maintain the quality of aircraft production and track all the faulty parts that are stored separately to ensure they don’t end up on a plane. However, Mohawk said he found out that some Boeing employees breached protocols and used faulty parts on aircraft when the quality inspection team wasn’t looking.
According to Mohawk, this was not just limited to nuts and bolts, but even rudders. He added that 42 faulty or nonconforming rudders went missing that would likely not last the 30 years of the standard expected lifespan of a jetliner. He added,
“I think without a proper investigation it could-- it could lead to a catastrophic event. It might not happen within the first year, but down the road they're not gonna last the lifetime that they're expected to last. It's like Russian roulette, you know? You don't know if it's gonna go down or not.”
Competing for parts
Former Boeing employee Merle Meyers was also inspired to reveal some of Boeing’s production practices after the death of another Boeing whistleblower, John Barnett. Meyers’ career at Boeing spanned three decades, and he began working as a parts inspector.
He told CBS that he first became concerned in 2015 after finding out that landing gear axles for the 787 Dreamliner aircraft that had been written off as defective were brought back to the factory. He added that they were corroded beyond repair and spray-painted red. Boeing denied ever using the defective axles on its airplanes.
Meyers goes on to add that such practices of parts unfit for use eventually making their way to airplanes had gone on for more than a decade. Sometimes, chemicals were used to clean them up before they were placed on airplanes.
He also added that managers would fight for aircraft parts, good or faulty, and compete with each other to complete the production of the aircraft they were assigned.
Plenty to clean up
Boeing has been under tremendous pressure both from regulations and airlines to improve its production quality as it sits on a huge backlog of orders. Several whistleblowers have expressed their concerns over the oversights at Boeing’s factories, forcing the plane maker to take steps and work on these issues.
Boeing has also made changes in its top management, including hiring a new CEO, who has been looking at ways to get the company back on track. The entire CBS interview can be accessed here. Simple Flying contacted Boeing for comments and received the following response,
"The current and former Boeing employees interviewed by 60 Minutes previously shared their concerns with the company. We listened and carefully evaluated their claims, and we do not doubt their sincerity.
"Some of their feedback contributed to improvements in our factory processes, and other issues they raised were not accurate. But to be clear: Based on investigations over several years, none of their claims were found to affect airplane safety."
PP
Re: More Boeing Bad News
Nearly 400 Boeing workers in Washington receive layoff notices
https://komonews.com/news/local/boeing- ... yroll-empl
WASHINGTON STATE — Boeing is preparing for a second wave of layoffs affecting its Washington workforce. According to a filing with the state's Employment Security Department, nearly 400 employees will lose their jobs.
Three hundred and ninety-six workers received permanent layoff notices on Dec. 9, 2024, according to the worker adjustment and retraining notification (WARN) layoff and closure database.
This follows the approximately 2,200 layoff notices issued to area workers in November. The aerospace giant announced in October that it planned to cut 10% of its workforce, about 17,000 jobs, in the coming months as it struggles to recover from financial and regulatory troubles as well as a strike by its machinists that lasted nearly two months.
The employees affected by this latest round of layoffs will remain on the payroll through the third week of February, the company said.
CEO Kelly Ortberg told employees the company must "reset its workforce levels to align with our financial reality."
That notice came in the midst of what would end up being a seven-week strike with 33,000 machinists union members walking picket lines. Those union members ratified a new deal the first week of November and are now back on the job.
Most of the layoff notices going out include a 60-day notice. Eligible employees will also get three additional months of subsidized health care, severance pay, and career transition help.
The decision to lay off employees comes from the company's $25 billion in losses over the past five years, according to Ortberg. The losses are partially attributed to the fatal crashes of the MAX jets in 2018 and 2019, and a door plug blowout over Oregon earlier this year.
Production rates slowed to a crawl, and the Federal Aviation Administration capped production of the 737 MAX at 38 planes per month, a threshold Boeing had yet to reach when the machinists' strike halted assembly lines.
The strike strained Boeing's finances. But Ortberg said on an October call with analysts that it did not cause the layoffs, which he described as a result of overstaffing.
PP
https://komonews.com/news/local/boeing- ... yroll-empl
WASHINGTON STATE — Boeing is preparing for a second wave of layoffs affecting its Washington workforce. According to a filing with the state's Employment Security Department, nearly 400 employees will lose their jobs.
Three hundred and ninety-six workers received permanent layoff notices on Dec. 9, 2024, according to the worker adjustment and retraining notification (WARN) layoff and closure database.
This follows the approximately 2,200 layoff notices issued to area workers in November. The aerospace giant announced in October that it planned to cut 10% of its workforce, about 17,000 jobs, in the coming months as it struggles to recover from financial and regulatory troubles as well as a strike by its machinists that lasted nearly two months.
The employees affected by this latest round of layoffs will remain on the payroll through the third week of February, the company said.
CEO Kelly Ortberg told employees the company must "reset its workforce levels to align with our financial reality."
That notice came in the midst of what would end up being a seven-week strike with 33,000 machinists union members walking picket lines. Those union members ratified a new deal the first week of November and are now back on the job.
Most of the layoff notices going out include a 60-day notice. Eligible employees will also get three additional months of subsidized health care, severance pay, and career transition help.
The decision to lay off employees comes from the company's $25 billion in losses over the past five years, according to Ortberg. The losses are partially attributed to the fatal crashes of the MAX jets in 2018 and 2019, and a door plug blowout over Oregon earlier this year.
Production rates slowed to a crawl, and the Federal Aviation Administration capped production of the 737 MAX at 38 planes per month, a threshold Boeing had yet to reach when the machinists' strike halted assembly lines.
The strike strained Boeing's finances. But Ortberg said on an October call with analysts that it did not cause the layoffs, which he described as a result of overstaffing.
PP
Re: More Boeing Bad News
Boeing resumes 737 MAX production in Renton after end of Machinists strike
https://www.seattletimes.com/business/b ... ts-strike/
Boeing has resumed production of the 737 MAX in Renton after a Machinists strike left its factories in the Puget Sound region idle from September to mid-November.
The company expects to resume production of the 767 and 777/777X planes in Everett in the days ahead, Boeing said Tuesday in a monthly announcement detailing orders and deliveries of its aircraft.
The news that it has restarted production comes less than a week after the head of the Federal Aviation Administration, Mike Whitaker, visited Boeing’s Puget Sound factories and said the company had not yet resumed its operations.
In an interview with NBC on Friday, Whitaker said Boeing has taken the last four weeks to make sure it is ready.
“In previous strikes, they’ve just come right back and started production. This time, following safety management principles, they’ve been very systematic, so that is a positive development,” Whitaker said.
Boeing said Tuesday it is focused on safety and has retrained and certified some employees and worked to ensure all of its tools and parts were ready for an increase in production activity.
As it recovered from the Machinists strike, Boeing delivered 13 planes, mostly from its inventory in November, the company said Tuesday.
That’s greater than the number of deliveries it made after the previous work stoppage, which lasted 58 days in 2008. In November of that year, it delivered four planes.
But it’s a significant drop from the same month a year ago, when it delivered 56 commercial airplanes.
A lot has happened at Boeing this year, including the eight-week strike that silenced the Renton and Everett factories. After walking out in September, the Machinists reached a contract agreement at the beginning of November and returned to the factory by Nov. 12.
Boeing has also operated at a slow production rate nearly all year, following a safety incident in January when a panel blew off a 737 MAX 9 plane midflight. After briefly grounding the MAX 9 fleet, the FAA capped production of the MAX plane at 38 per month. Boeing has yet to reach that threshold.
Now, it is working to return to prestrike production rates, the company said Tuesday. It’s not clear what that rate would look like for the MAX. In Everett in August, a month before the strike, Boeing was building three 767s a month and four 777/777Xs per month, a spokesperson said.
In October, when Machinists were on strike for the entire month, Boeing delivered 14 planes, including four from its nonunion South Carolina plant and 10 from Washington facilities that were handled by managers and others not on strike.
Of the November deliveries, nine were 737 MAX planes and two were 777 freighters. The other two were 787s, which Boeing produces in its South Carolina facility.
From the beginning of the year through the end of November, Boeing delivered 318 airplanes, including 243 of the 737 MAX.
For comparison, Boeing’s rival Airbus made 84 deliveries in November and 643 in the first 11 months of the year. It also recorded 30 gross orders in November and 742 net orders for the year.
Boeing said Tuesday it booked 49 gross orders in November, including 34 orders for the 737 MAX and 15 orders for the 767-based KC-46 tanker. Of the MAX orders, five were from Alaska Airlines.
Year to date, Boeing’s commercial division received 427 gross orders. After cancellations, conversions and adjustments for some accounting principles, Boeing’s net orders for the year so far are 191.
The company’s order backlog grew from 5,462 at the end of October to 5,499 at the end of November.
PP
https://www.seattletimes.com/business/b ... ts-strike/
Boeing has resumed production of the 737 MAX in Renton after a Machinists strike left its factories in the Puget Sound region idle from September to mid-November.
The company expects to resume production of the 767 and 777/777X planes in Everett in the days ahead, Boeing said Tuesday in a monthly announcement detailing orders and deliveries of its aircraft.
The news that it has restarted production comes less than a week after the head of the Federal Aviation Administration, Mike Whitaker, visited Boeing’s Puget Sound factories and said the company had not yet resumed its operations.
In an interview with NBC on Friday, Whitaker said Boeing has taken the last four weeks to make sure it is ready.
“In previous strikes, they’ve just come right back and started production. This time, following safety management principles, they’ve been very systematic, so that is a positive development,” Whitaker said.
Boeing said Tuesday it is focused on safety and has retrained and certified some employees and worked to ensure all of its tools and parts were ready for an increase in production activity.
As it recovered from the Machinists strike, Boeing delivered 13 planes, mostly from its inventory in November, the company said Tuesday.
That’s greater than the number of deliveries it made after the previous work stoppage, which lasted 58 days in 2008. In November of that year, it delivered four planes.
But it’s a significant drop from the same month a year ago, when it delivered 56 commercial airplanes.
A lot has happened at Boeing this year, including the eight-week strike that silenced the Renton and Everett factories. After walking out in September, the Machinists reached a contract agreement at the beginning of November and returned to the factory by Nov. 12.
Boeing has also operated at a slow production rate nearly all year, following a safety incident in January when a panel blew off a 737 MAX 9 plane midflight. After briefly grounding the MAX 9 fleet, the FAA capped production of the MAX plane at 38 per month. Boeing has yet to reach that threshold.
Now, it is working to return to prestrike production rates, the company said Tuesday. It’s not clear what that rate would look like for the MAX. In Everett in August, a month before the strike, Boeing was building three 767s a month and four 777/777Xs per month, a spokesperson said.
In October, when Machinists were on strike for the entire month, Boeing delivered 14 planes, including four from its nonunion South Carolina plant and 10 from Washington facilities that were handled by managers and others not on strike.
Of the November deliveries, nine were 737 MAX planes and two were 777 freighters. The other two were 787s, which Boeing produces in its South Carolina facility.
From the beginning of the year through the end of November, Boeing delivered 318 airplanes, including 243 of the 737 MAX.
For comparison, Boeing’s rival Airbus made 84 deliveries in November and 643 in the first 11 months of the year. It also recorded 30 gross orders in November and 742 net orders for the year.
Boeing said Tuesday it booked 49 gross orders in November, including 34 orders for the 737 MAX and 15 orders for the 767-based KC-46 tanker. Of the MAX orders, five were from Alaska Airlines.
Year to date, Boeing’s commercial division received 427 gross orders. After cancellations, conversions and adjustments for some accounting principles, Boeing’s net orders for the year so far are 191.
The company’s order backlog grew from 5,462 at the end of October to 5,499 at the end of November.
PP
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Re: More Boeing Bad News
The Federal Aviation Administration is requiring airlines to inspect landing gear on some Boeing 767 aircraft. An airworthiness directive was published Thursday and will go into effect on Feb. 12.
According to the directive, operators will be required to inspect Boeing 767-200, 767-300, and 767-300F jets. The order comes after a recent main gear collapse incident.
According to the directive, operators will be required to inspect Boeing 767-200, 767-300, and 767-300F jets. The order comes after a recent main gear collapse incident.
Re: More Boeing Bad News
Boeing delivered 30 airplanes in December, but gap with Airbus widened in 2024
The tally widened the delivery gap with Boeing’s chief rival, Airbus, which gave 766 jetliners to customers last year, the most since 2019.
https://www.nbcnews.com/business/busine ... rcna187615
Boeing handed over 348 airplanes in 2024, about a third fewer than it did a year earlier as the aerospace giant struggled with a crisis after a midair door panel blowout a year ago and a machinist strike in the fall that halted production.
The tally widened the delivery gap with Boeing’s chief rival, Airbus, which gave 766 jetliners to customers last year, the most since 2019, though both companies are facing supply chain strains that have slowed production and fulfillment of their otherwise robust backlogs.
In December, Boeing delivered 30 airplanes as it restarted production of its bestselling 737 Max planes after the nearly eight-week machinist strike ended the month before. Deliveries are key for manufacturers because it is when customers pay the bulk of an airplane’s price.
A shortage of aircraft from suppliers has driven up lease rates, with rentals expected to hit records this year, aviation data firm IBA said in a report this month.
Boeing logged 142 gross orders in December for new planes, including 100 737 Maxes for Turkey’s Pegasus Airlines and 30 787s for flydubai, whose intention to purchase was first unveiled at the Dubai Air Show in late 2023. Boeing also took more than 130 orders off its books for India’s now-defunct carrier Jet Airways.
Boeing’s gross orders for the year stood at 569, while net orders were 377 airplanes — 317 including accounting adjustments. Airbus, which released its December and full-year tally last week, said it logged 878 gross orders last year and 826 net orders.
Boeing is scheduled to report fourth-quarter and full-year results before the market opens on Jan. 28, when CEO Kelly Ortberg and other Boeing leaders will face investor questions about their plans to ramp up production and restore the aerospace giant’s profitability.
PP
The tally widened the delivery gap with Boeing’s chief rival, Airbus, which gave 766 jetliners to customers last year, the most since 2019.
https://www.nbcnews.com/business/busine ... rcna187615
Boeing handed over 348 airplanes in 2024, about a third fewer than it did a year earlier as the aerospace giant struggled with a crisis after a midair door panel blowout a year ago and a machinist strike in the fall that halted production.
The tally widened the delivery gap with Boeing’s chief rival, Airbus, which gave 766 jetliners to customers last year, the most since 2019, though both companies are facing supply chain strains that have slowed production and fulfillment of their otherwise robust backlogs.
In December, Boeing delivered 30 airplanes as it restarted production of its bestselling 737 Max planes after the nearly eight-week machinist strike ended the month before. Deliveries are key for manufacturers because it is when customers pay the bulk of an airplane’s price.
A shortage of aircraft from suppliers has driven up lease rates, with rentals expected to hit records this year, aviation data firm IBA said in a report this month.
Boeing logged 142 gross orders in December for new planes, including 100 737 Maxes for Turkey’s Pegasus Airlines and 30 787s for flydubai, whose intention to purchase was first unveiled at the Dubai Air Show in late 2023. Boeing also took more than 130 orders off its books for India’s now-defunct carrier Jet Airways.
Boeing’s gross orders for the year stood at 569, while net orders were 377 airplanes — 317 including accounting adjustments. Airbus, which released its December and full-year tally last week, said it logged 878 gross orders last year and 826 net orders.
Boeing is scheduled to report fourth-quarter and full-year results before the market opens on Jan. 28, when CEO Kelly Ortberg and other Boeing leaders will face investor questions about their plans to ramp up production and restore the aerospace giant’s profitability.
PP