JAN 28 – Boeing lost nearly a billion dollars a month in 2024, as it grappled with a safety crisis, quality control issues and a damaging strike.
The aerospace giant lost $11.8bn across the year, its worst result since 2020, when the aviation industry was grounded by the Covid pandemic.
In the three months to the end of December, when strikes were affecting the business, it lost $3.8bn.
As well as suffering from well-publicised problems at its commercial aircraft unit, Boeing also struggled with issues affecting a number of defence programmes.
Chief executive Kelly Ortberg said the company was focused on what he called the “fundamental changes” needed to restore its fortunes and restore trust.
Boeing has had a dreadful year by any measure. In January 2024, a door panel fell off a brand new 737 Max shortly after take-off, leaving a gaping hole in the side of the plane. Investigators said it had not been bolted on properly.
The incident highlighted serious quality control failings at the company – and at its main supplier, Spirit Aerosystems. It also reignited concerns about Boeing’s attitude towards safety.
Boeing had been trying to emerge from the shadow of two high-profile crashes involving a different 737 model, the Max 8, in 2018 and 2019, which killed 346 people.
The latest incident forced Boeing to curb production, as regulators called for changes on the factory floor, and demanded the implementation of a comprehensive safety and quality control plan.
In August, Boeing appointed its new chief executive Mr Ortberg, a veteran engineer who was brought in to steady the ship.
But he immediately faced a serious challenge.
A strike by 33,000 workers, most of them in Boeing’s heartlands around Seattle brought two of its most important factories to a halt, and halted production of the 737 Max, the 777 and the 767 freighter.
The seven-week stoppage, which began in September, reflected deep seated resentment among employees over their pay and retirement provisions. The dispute was settled in early November, but it cost the company billions.
Boeing did take action. It announced plans to lay off 10% of its workforce and began raising more than $20bn through a combination of share sales and borrowing in order to protect its credit rating.
It also delayed the entry into service of the 777X. A new version of the long-haul workhorse, it was already years late but had been expected to start operating in 2025. It will not now carry passengers until 2026.
In total, Boeing delivered 348 commercial aircraft last year. Its great rival Airbus delivered 766.
Problems at Boeing’s defence business have been less visible, but no less damaging. The unit lost more than $5bn, largely thanks to rising costs on fixed price military contracts.
Commenting on the results, Mr Ortberg said: “We made progress on key areas to stabilize our operations during the quarter and continued to strengthen important aspects of our safety and quality plan.
“My team and I are focused on making the fundamental changes needed to fully recover our company’s performance and restore trust with our customers, employees, suppliers, investors, regulators and all others who are counting on us.”
By BBC
