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 and immediately turned its attention to union workers who will vote Wednesday on whether to accept a contract offer from the company or continue their crippling strike , which has been dragging on for almost six weeks.

New CEO Kelly Ortberg laid out his turnaround plan Boeing after years of heavy losses and reputational damage.

In a speech to investors later Wednesday, Ortberg said Boeing needed “a fundamental culture change at the company.” To achieve this, he said, company leaders need to spend more time on factory floors to know what's going on there and “prevent problems from getting worse and work better together to identify, fix and understand the root cause.” “

Ortberg reiterated that he wanted to “redesign” the relationship between management and workers “so that we are no longer so separated from each other in the future.” He expressed hope that machinists will vote to accept the company's latest contract offer and end their strike.

“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.

The strike is an early test for Ortberg, a Boeing outsider became CEO in August.

Ortberg has already announced it Mass layoffs and a plan for it raise enough money to avoid filing for bankruptcy. He must convince federal regulators that Boeing is improving its safety culture and is ready to ramp up production of the 737 Max, a crucial step to raise much-needed funds.

However, Boeing cannot produce new 737s until the strike by 33,000 machinists that has closed assembly plants in the Seattle area ends.

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

Boeing said Wednesday that it lost $6.17 billion in the period ended Sept. 30, resulting in an adjusted loss of $10.44 per share. Analysts surveyed by Zacks Investment Research expected a loss of $10.34 per share.

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

Shares were flat before the opening bell.

Boeing hasn't had a profitable year since 2018, and Wednesday's numbers represent the second-worst quarter in Boeing's history. The long-profitable company's fortunes deteriorated after two of its 737 Max planes crashed in October 2018 and March 2019 346 people were killed. Safety concerns were raised again when a panel on a Max blew off during an Alaska Airlines flight in January.

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

Investors were looking Ortberg Exuding calm, determination and urgency as he chairs a conference call for the first time since leading Rockwell Collins, a maker of avionics and flight controls for airline and military aircraft, in the last decade.

But the biggest news of the day may come Wednesday evening, when the International Association of Machinists and Aerospace Workers announces whether striking workers are ready to return to work.

They will vote on a at union halls in the Seattle area and elsewhere Boeing offer These include salary increases of 35% over four years, ratification bonuses of $7,000 and the retention of performance bonuses that Boeing wanted to eliminate.

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

In a picket line outside the Boeing factory in Everett, Washington, some machinists encouraged their colleagues to vote “no.”

“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.