$6billion of losses reports Boeing...... as company faces a crossroads.......

Boeing is at a crossroads, with trust in the aerospace company all but completely eroded, relations with the workforce at an all-time low, with over 30,000 employees on strike, a mountain of debt that would cripple most firms and many products performing below the expected standard. It is perhaps not surprising that the firm posted massive losses this week as its third-quarter results were published. 

Boeing recorded third-quarter revenues of $17.8 billion, operating cash flow of -$1.3 billion and free cash flow of -$2.0 billion. Cash and investments in marketable securities totalled $10.5 billion, compared to $12.6 billion at the beginning of the quarter driven by free cash flow usage in the quarter. In October, the company entered into a new $10.0 billion short-term credit facility and now has access to total credit facilities of $20.0 billion, which remain undrawn. Its losses are around $6 billion, that's about £4.6 billion.

Last week, the company announced it was seeking up to  $35 billion (roughly £27 billion) in new funding. In July, it agreed to plead guilty to a criminal fraud conspiracy charge and to pay at least $243.6 million after breaching a 2021 deferred prosecution deal in relation to the two 737-MAX crashes that caused 346 lives to be lost around five years ago.

Boeing President and CEO Kelly Ortberg believes that despite its current woes, the firm will emerge from this depressing period in its history and regain its now former glory.  He wants to put the ailing company in a new direction, to restore its reputation and market-leading position. 

The company has four new key objectives he writes: First, we need a fundamental culture change in the company.  Second, we must stabilize the business. Third, we need to improve our execution discipline on new platform commitments across the company. And fourth, while doing the first three, we must build a new future for Boeing."

It isn't all doom and gloom for Boeing,  thanks to the unfortunately tight commercial aviation industry, there are only two major aircraft makes - Boeing and European rival, Airbus. Partly because of this, Boeing has a backlog worth roughly half a trillion dollars and an equally sizable backlog at Airbus, new orders are pretty much guaranteed as passenger demand starts to climb higher than pre-pandemic levels. 

Ortberg promised that Boeing would redefine the company values,  to make leaders accountable for delivering safe, high-quality products and services. "I know culture change starts at the top. Our leaders, from me on down, need to be closely integrated with our business and the people who are doing the design and production of our products.

We need to be on the factory floors, in the back shops and in our engineering labs.

We need to know what’s going on, not only with our products, but with our people.

And most importantly, we need to prevent the festering of issues and work better together to identify, fix, and understand the root cause."

One of the first key activities of the company must surely be ending the strike by nearly 33,000 of its workers. The company has already used previously deployed actions, calling each offer a 'final' one and threatening intensive layoffs and recently put another final offer to staff.  

"I remain committed to getting the team back and improving our relationship, so we don’t become so disconnected in the future. I’m very hopeful that the package we put forward will allow our employees to come back to work so we can immediately focus on restoring the company." Ortberg said.

At the end of the strike, if workers accept the current offer, the firm will follow its newly established Safety and Quality Management Systems to restart production in factories and in its wider supply chain. This is a plan, reviewed with the FAA and will be part of the criteria the firm will use to measure the stability of the production system to gain authority to increase 737 rates.

Another big rock to stabilize the company Ortberg offered was to manage the firm's balance sheet to best support retaining our investment grade credit rating. He stated the company had a plan and was executing that plan but didn't elaborate on what that plan entailed. 

He also stated Boeing had to improve the quality of its products, both commercial and military with a disciplined program and risk management in all phases of the project, including the bid phase. "Again, this is an area where we need the management team much more focused on their programs and much more active working with their customers on ensuring success and anticipating risks before they happen," Ortberg commented. 

As for building a new future for Boeing, that was less clear, he indicated they needed to develop a new aircraft for the commercial market. 

At the same time the results were issued, more bad news came to light when a Boeing-designed and built communications satellite for Intelsat had broken up in orbit. Intelsat confirmed the "total loss" of iS-33e, affecting customers in Europe, Africa and parts of the Asia-Pacific region. 

A comprehensive analysis of the incident has been started, with Intelsat stating  "We are coordinating with the satellite manufacturer, Boeing, and government agencies to analyse data and observations." 

SpaceTrack confirmed the incident, with the US Space Forces confirming it was "currently tracking around 20 associated pieces" of the broken-up satellite.