Boeing is expected to report a big Q3 loss, then wait for results of vote by striking workers
EVERETT, Wash. — Wednesday will be one of the most important days in a volatile year Boeingwhich is expected to report a huge third-quarter loss, introduce its new CEO on its first earnings call, and learn whether machinists will end a strike that has crippled the company’s aircraft production for more than a month.
The strike is an early test for Boeing outsider Kelly Ortberg became CEO in August.
Ortberg has already announced this large-scale layoffs and a plan to raise enough money to avoid a bankruptcy filing. He must convince federal regulators that Boeing is fixing its safety culture and is ready to ramp up production of the 737 Max — a crucial step to raising much-needed cash.
However, Boeing cannot produce new 737s until the five-week strike by 33,000 operators that has closed assembly plants in the Seattle area ends.
Ortberg “has a lot on his plate, but he’s probably focused on getting these negotiations done. That’s the closest we’ll get to the boat,” said Tony Bancroft, portfolio manager at Gabelli Funds, an investor in Boeing.
Boeing hasn’t had a profitable year since 2018, and the situation is about to get worse before it gets better.
Analysts expect Boeing to announce Wednesday that it lost about $6 billion in the third quarter, including $3 billion in costs related to aircraft and $2 billion in losses for its defense and space programs.
Investors will be looking Ortberg to exude calm, determination and urgency as he led an earnings call for the first time since leading Rockwell Collins, a maker of avionics and flight controls for aviation and military aircraft, in the past decade.
The biggest news of the day, however, is likely to come Wednesday evening, when the International Association of Machinists and Aerospace Workers reveals whether striking workers are ready to return to work.
They will vote at union halls in the Seattle area and elsewhere on a Boeing offer that includes pay 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 the union’s demand to reinstate the traditional pension plan, which had been frozen for a decade. However, older workers would receive a slight increase in their monthly pension benefits.
At a picket line outside the Boeing factory in Everett, Washington, some machinists encourage colleagues to vote no on the proposal.
“The pension should have been the top priority. We all said this was our top priority, along with wages,” said Larry Best, a customer quality coordinator with 38 years of experience at Boeing. “This is prime time’s best chance to get our pensions back, and we should all stay out and dig our heels in.”
Best also believes that the wage increase over three years should be 40 percent to offset a long period of stagnant wages, now combined with high inflation.
“You can see there was a big turnout today. I’m pretty sure they don’t like the contract because that’s why I’m here,” said another picketer, Bartley Stokes Sr., who started working at Boeing in 1978. “We’re going to show our solidarity and stand with our union brothers and sisters and vote this thing down because they can do better.”
___
Koenig reported from Dallas.