Boeing Struggles with Challenges: Job Cuts and Production Delays

Boeing is increasingly under pressure. Due to an unexpectedly high loss in the third quarter, triggered by a strike of the International Association of Machinists and Aerospace Workers in the Seattle area, the company plans to cut 10 percent of its workforce. CEO Kelly Ortberg emphasized that this step is necessary to align the personnel structure with financial realities. A total of 17,000 positions will be eliminated worldwide, affecting all levels up to executives. Ortberg also announced comprehensive cost-saving measures and production delays. The nearly month-long strike by 33,000 workers exacerbates Boeing's challenges, ranging from safety deficiencies in the commercial aviation business to setbacks in the Starliner space program. The strike is blamed for a pre-tax charge of $3 billion in commercial aviation results, which is part of an expected loss of $9.97 per share. Despite these hurdles, Ortberg stated that Boeing is making strategic decisions for the future to secure long-term competitiveness. Amid the current issues, the delivery of the 777X jet will be postponed to 2026. The production of the 767 freighter is to cease in 2027 once current orders are fulfilled. Additionally, the defense and space division is to be more closely monitored due to the threat of significant new losses. The wave of layoffs was preceded by an incident with Alaska Airlines in January, which prompted the U.S. Federal Aviation Administration (FAA) to tighten its scrutiny of Boeing's production processes. This incident and the associated MAX issues led to a current halt in MAX production due to the IAM strike. Additionally, a court in Texas is hearing the proposal of a criminal settlement by the U.S. Department of Justice. Families of the MAX victims oppose this settlement and demand a public criminal prosecution of Boeing and former senior executives. Negotiations between Boeing and the union were suspended after two fruitless days. Boeing accused the union of making unreasonable demands, including a 30 percent salary increase. The union responded by announcing a strike rally in Seattle, intended to send a strong signal to Boeing and the entire industry. The Boeing stock recorded a 1.9 percent decline in after-hours trading.