Boeing (NYSE: BA) reported a wider net loss in the third quarter due to a financially damaging strike, prompting Chief Executive Kelly Ortberg to call for a “fundamental culture change” at the aerospace giant.
In a letter to employees and investors, Ortberg acknowledged that the company was “at a crossroads” after posting a net loss of $6.17 billion during the quarter, compared to a loss of $1.64 billion in the same period last year. He highlighted “serious performance lapses” that had eroded customer trust and contributed to the company’s growing debt.
Chief Financial Officer Brian West cautioned analysts that Boeing would continue to experience cash flow challenges in its 2025 fiscal year and the final quarter of 2024, causing a decline in Boeing’s stock value.
The results come as Boeing anticipates a crucial vote by approximately 33,000 striking workers in the US Pacific Northwest on a revised compensation package, raising hopes for an end to the more than five-week work stoppage.
The strike has put additional strain on Boeing’s finances, jeopardized its credit rating, and resulted in a production halt for some of its top-selling aircraft models. Prior to the strike, Boeing was already under scrutiny for its safety record following a dangerous incident in January.
Operating cash flow for the quarter ending on September 30 plummeted to negative $1.35 billion, attributed to lower commercial widebody deliveries, unfavorable working capital timing, and the strike’s impact.
The revised offer for striking workers includes a $7,000 ratification bonus, reinstated incentive plan, increased contributions to 401(k) retirement plans, and other benefits. The details of the settlement, including the return-to-work date, will be part of the voting process.
Despite the ongoing challenges, Boeing’s new CEO Kelly Ortberg emphasized the need for a significant cultural shift within the company to stabilize the business and improve overall performance.
Quarterly revenues for Boeing’s commercial airlines division declined by 5% to $7.44 billion, falling short of expectations. Total group-wide revenue of $17.84 billion also missed estimates.
Boeing has filed a registration statement to raise up to $25 billion through debt securities and other stock classes. The company has also secured a $10 billion credit line from major banks to strengthen its financial position.
Ortberg reiterated the necessity of making tough decisions, including structural changes, to enhance the company’s performance and ensure long-term competitiveness.