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Boeing’s new chief executive, Kelly Ortberg, shared his vision on Wednesday for how to restore the beleaguered business, delivering his most comprehensive public remarks on strategy since taking the role in August. But, he acknowledged, he must first end a financially damaging strike.
The aircraft maker also shared more detail about its quarterly financial results, including a $6.2 billion loss in the three months ending in September. The company had previewed that setback earlier in the month.
In a message to employees, Mr. Ortberg shared a speech that he planned to deliver to investor analysts on a call later in the day to discuss Boeing’s quarterly financial results. In it, he offered a diagnosis: The company had lost too much trust, gained too much debt and made too many mistakes. To put Boeing back on the right path would require “fundamental culture change,” stabilizing the business and improving execution.
“Our leaders, from me on down, need to be closely integrated with our business and the people who are doing the design and production of our products,” he said. “We need to be on the factory floors, in the back shops and in our engineering labs. We need to know what’s going on, not only with our products, but with our people.”
To achieve his ambitions for the company, Mr. Ortberg will first have to bring about the end of a strike that has brought most of the company’s commercial airplane production to a halt. But there is hope: Both sides negotiated a new offer in recent days, which workers will vote to approve or reject on Wednesday.
“I’m very hopeful that the package we put forward will allow our employees to come back to work so we can immediately focus on restoring the company,” Mr. Ortberg said. “Once we get back, we have the task of restarting the factories and the supply chain.”
The vote comes over a month after more than 33,000 union members overwhelmingly rejected a negotiated offer and walked off the job Sept. 13. Most of the workers represented by the union, the International Association of Machinists and Aerospace Workers, are involved in the production of commercial airplanes in the Seattle area. One major Boeing jet, the 787 Dreamliner, is manufactured at a nonunion factory in South Carolina.
The new contract offer includes cumulative raises of nearly 40 percent over four years, which is both a significant increase over the rejected offer and close to the union’s opening request. The offer also includes a $7,000 ratification bonus and bigger company contributions to retirement plans. The new contract would preserve an incentive bonus program that would have been replaced by a new retirement plan in the initial offer. The offer would not revive a defined benefit pension that was frozen a decade ago and that many workers wanted restored.
Contract talks had broken down this month, but the two sides negotiated the new offer in recent days with help from the Biden administration. Julie Su, the acting labor secretary, flew to Seattle to meet with both the company and the union.
An end to the strike would be good news for Boeing’s many suppliers. Spirit AeroSystems, which makes the body of the 737 Max and has agreed to sell itself to Boeing, recently announced plans to furlough about 700 employees, starting next week, because of the strike. If the deal is approved, striking Boeing employees will have to return to work on Oct. 31, though they can choose to come back as early as this Friday, the union said.
Boeing is still reeling from a safety crisis that began when a panel blew off a 737 Max 9 during an Alaska Airlines flight in January. There were no major injuries, but the incident renewed concerns about the quality of Boeing’s planes. The Federal Aviation Administration stepped up oversight of the company, limiting production of the Max. Boeing also added inspections and training and changed processes and procedures. The overhaul culminated in Mr. Ortberg’s appointment.
In his remarks, Mr. Ortberg also stressed the importance of adopting a safety and quality plan designed in coordination with the F.A.A. in the aftermath of the Alaska Airlines incident.
He said that Boeing must improve its balance sheet to keep its investment grade credit rating, which could be in jeopardy if the strike went on much longer. The company has not posted an annual profit since 2018 and, this month, it reported $5 billion in new costs from several commercial and defense programs.
To turn the company around, Mr. Ortberg this month announced plans to cut Boeing’s work force by about 10 percent, or 17,000 jobs. He said his restructuring would slash costs and improve plane production, telling employees that restoring the company “requires tough decisions.” Boeing also recently disclosed plans to raise as much as $25 billion by selling debt or stock over the next three years.
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