Boeing reports quarterly loss of $6 billion ahead of union vote

EVERETT, Wash. (AP) — Boeing reported a third-quarter loss of more than $6 billion before addressing questions about whether it did striking factory workers would accept a contract offer Wednesday and the end of a strike that has crippled the company's aircraft production for nearly six weeks.

Members of the International Association of Machinists and Aerospace Workers voted at union meetings in the Seattle area and elsewhere on a contract that would provide pay increases of 35% over four years. Their strike since mid-September served as Boeing boss Kelly Ortberg's first test became managing director in August.

In his first address to investors, Ortberg said Boeing needed “a fundamental culture change” and laid out his plan to turn around the company after years of heavy losses Damage to the reputation of the aerospace giant.

Ortberg reiterated in a message to employees and on the conference call that he wanted to “redesign” the relationship between management and workers “so that we are no longer so far apart in the future.” He said business leaders need to spend more time on factory floors to know what's going on and “prevent problems from festering and work better together to identify, resolve and understand the root cause.”

Ortberg expressed the hope that the 33,000 striking machinists in the Pacific Northwest would vote to approve the company's latest contract offer. Your union district was scheduled to announce the results Wednesday evening.

Ortberg, a Boeing outsider who previously ran Rockwell Collins, a maker of avionics and flight controls for airline and military aircraft, said Boeing is at a crossroads.

“Confidence in our company has waned. We have too much debt. We have had serious performance deficiencies across the company that have disappointed many of our customers,” he said.

But Ortberg also highlighted the company's strengths, including a backlog of aircraft orders worth half a trillion dollars.

“It will take time to return Boeing to its former heritage, but with the right focus and culture, we can once again be an iconic company and a leader in the aerospace industry,” he said.

Ortberg announced this previously Mass layoffs – about 17,000 people – and a plan to go with it raise enough money to avoid filing for bankruptcy.

“He has a lot to do, but he's probably fully focused on getting these negotiations done. This is the closest alligator has to a boat,” said Tony Bancroft, portfolio manager at Gabelli Funds, a Boeing investor.

Boeing hasn't had a profitable year since 2018, and Wednesday's numbers marked the second-worst quarter in the manufacturer's history. Boeing reported that it lost $6.17 billion in the period ended Sept. 30, an adjusted loss of $10.44 per share. Analysts surveyed by Zacks Investment Research had expected a loss of $10.34 per share.

Sales totaled $17.84 billion, in line with Wall Street estimates.

The company burned through nearly $2 billion of cash in the quarter, weakening its balance sheet, which is burdened with $58 billion in debt. Chief Financial Officer Brian West said the company will burn cash through 2025, but at a slower pace.

Shares of The Boeing Co. fell 3% in midday trading.

Afterwards, the fortunes of the long-profitable company deteriorated two of its 737 Max jetliners crashed in October 2018 and March 2019, killing 346 people. Safety concerns were raised again when a panel on a Max blew off during an Alaska Airlines flight in January.

Ortberg must convince federal regulators that Boeing will fix the problem Safety culture and is poised to ramp up production of the 737 Max – a crucial step to raise much-needed cash. However, this cannot happen until the striking workers return to their jobs.

In addition to salary increases, Boeing's latest contract offer includes $7,000 in ratification bonuses and the retention of performance bonuses that Boeing sought to eliminate.

Boeing steadfastly resisted union demands to restore a traditional pension plan that was frozen a decade ago. However, older workers would receive a slight increase in their monthly pension payments.

At a picket line Tuesday outside a Boeing factory in Everett, Washington, some strikers encouraged their colleagues to reject the amended contract.

“Pension should have been the top priority. We all said this was our top priority along with pay,” said Larry Best, a customer quality coordinator with 38 years of experience at Boeing. “Now is the best opportunity at the best time to get our pension back and we all need to stay out and get involved.”

Best also believes the wage increase should be 40% over three years to offset a long period of stagnant wages that is now accompanied by high inflation.

“You can see we had a great turnout today. I'm pretty sure they don't like the contract because that's the reason I'm here,” said another picketer, Bartley Stokes Sr., who started at Boeing in 1978. “We are here in large numbers and we “We will show our solidarity and stand with our union brothers and sisters and reject this cause because they can do better.”

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Koenig reported from Dallas.