The company is in deep trouble.
Job Culling
Amid a disastrous year and an ongoing strike, Boeing announced last week that it will fire a staggering ten percent of its workforce, or about 17,000 employees.
And now, on Tuesday, Reuters reports that thousands of these layoff notices will start going out within the coming month, as it heads into increasingly dire financial straits.
Beyond the safety blunders of its airplanes and the embarrassing failure of its Starliner spacecraft, Boeing has failed to reach an agreement with The International Association of Machinists and Aerospace Workers (IAM), which represents some 33,000 of its West Coast employees.
On September 13, machinists overwhelmingly rejected the union’s tentative deal with Boeing that outlined a 25 percent wage increase over four years. Since then, 33,000 workers have been on strike, in the hopes of reaching a 40 percent increase. The massive layoffs, however, could threaten to break the strike.
“Boeing just turned its back on 17,000 of its own workers — the same people who carried Boeing through crisis after crisis, year after year,” said IAM president Brian Bryant in a statement, as quoted by Reuters.
Year to Forget
In hindsight, the midair door plug blowout on a Boeing 737 MAX 9 airliner in January was just an omen of the cavalcade of crises to come for the aerospace company.
The near-disastrous incident kicked off heightened regulatory and media scrutiny of Boeing’s manufacturing practices, which consequently raised questions about its alleged poor working conditions, too. The untimely deaths of two Boeing whistleblowers only scandalized things further.
All the while, the company has struggled to keep up manufacturing of several of its aircraft, including its flagship 777X jetliner, announcing a one-year delay this week. Though it has not changed its official production target, Boeing has signaled that there will be major delays with the 737 MAX, its most popular jetliner, as well.
The company’s efforts in the final frontier have similarly fallen flat. In its debut mission, the Starliner spacecraft that brought astronauts to the International Space Station sprung helium leaks and was considered too unsafe to bring two — now stranded — astronauts back home on its return trip.
Last Resort
Boeing’s stock position, needless to say, has reflected its disaster streak. As of Monday, shares in the company are down by 42 percent year-to-date, per Barrons.
Cash flow is also a problem. Analysts estimate that the strike is costing the company upwards of $100 million per day. With yet another quarter in the red, the company’s core operating losses since 2019 are over $33 billion.
According to reports, Boeing is now seeking to raise some $35 billion from bank loans and stock options — a last ditch effort to bail itself out of its horrendous position.
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