Big day for Boeing: the American aircraft manufacturer published its worst quarterly loss in four years on Wednesday, but hopes for the validation of a new social agreement, which would put an end to the costly strike which has paralyzed two crucial factories since mid-September.
• Also read: Agreement in principle between Boeing and its workers
No surprise: Boeing announced a net loss of $6.17 billion, weighed down by heavy charges of five billion in its Commercial Aviation (BCA) and Defense and Space (BDS) branches which it had unveiled on October 12. Factset analysts’ consensus was for $6.12 billion in losses.
“My mission is quite clear. Put this great ship back in the right direction and reestablish Boeing in its leadership position that we know and that we want,” commented Kelly Ortberg, boss of the aircraft manufacturer since the beginning of August.
According to an AFP calculation, Boeing suffered more than $31 billion in net losses between the start of 2020 and the end of September 2024. Its largest quarterly loss reached $8.42 billion in the fourth quarter of 2020.
Around 2:20 p.m. GMT, Boeing shares fell 0.90% on the New York Stock Exchange.
The BCA branch is suffering from the slowdown in production, in order to implement quality improvement measures after several years of oddities which culminated with an in-flight incident last January.
It is also suffering from the walkout of more than 33,000 workers around Seattle (northwest) – where Boeing was born in July 1916 – which has paralyzed the group’s two main factories since September 13, producing the 737 (its most important aircraft). sold), the 777, the 767 and several military programs.
The local branch of the Machinists’ Union (IAM) announced a tentative agreement “worthy of consideration” on Saturday. A first agreement, announced on September 8, was massively rejected by union members, who voted for an immediate strike.
The new draft agreement provides in particular for a salary increase of 35% over four years (the IAM demanded 40%), the reestablishment of an increased annual bonus, an increased employer contribution to the retirement plan and an increased signing bonus.
Ratification?
IAM members vote on Wednesday. The result is expected in the evening. If the draft agreement is ratified, work could resume on Friday.
“I think it’s going to be a close vote,” Jon Holden, president of the local IAM-District 751 branch, said Tuesday on CNBC.
In the event of rejection, “we will resume negotiations. (…) This is the only option, our members will make this choice,” explained Mr. Holden.
Kelly Ortberg told CNBC on Wednesday that she was “very optimistic about the vote” during her first interview since her nomination.
Resumption of activity is a priority. In September, Boeing delivered 33 planes, completed before the strike, but the next few months are expected to be frugal.
In addition to the dissatisfaction of airlines, forced to review their flight programs since 2023, fewer deliveries also mean less revenue – around 60% of the price is paid on delivery – and, consequently, shaky cash flow.
The aeronautics giant was already struggling to recover after the plane crashes of 2018 and 2019, which left 346 dead, and the Covid-19 pandemic.
Over the weeks, Boeing has announced measures to preserve its cash flow, including a 10% reduction in its global workforce (almost 171,000 employees by the end of 2023).
“We are overstaffed relative to the prospects of our company,” Mr. Ortberg explained on CNBC, acknowledging that if the strike were to continue, it would end up having an impact on employment.
To replenish its cash flow, the group has also obtained a second credit line of ten billion dollars and plans to raise up to 25 billion over three years.
According to experts, it should start with a capital increase of 10 to 15 billion dollars at the end of 2024-beginning of 2025.
TD Cowen analysts also mentioned sales of non-strategic assets, identifying around twenty billion potential.
According to Ortberg, a review of the portfolio is underway and it will “probably” be appropriate to “streamline” it.
The BDS branch is also giving it a hard time, because it generates significant losses on fixed-price contracts for the American government and for the American space agency (Nasa).
Regarding the crashes, Boeing is waiting to know whether a federal judge approves a guilty plea agreement reached at the end of July allowing it to avoid a criminal trial. In the civil aspect, more than 90% of complaints have resulted in a settlement out of court at this stage.
