SoylentNews

upstart [soylentnews.org] writes:

████ # This file was generated bot-o-matically! Edit at your own risk. ████

Boeing Slashes 10% Of Workforce, CEO Warns "Hard To Overstate The Challenges We Face" [soylentnews.org]:

In what some have called a panic/desperation negotiating tactic, Boeing has announced (late on a Friday afternoon) that it will slash its workforce by 10% as the pummeled planemaker struggles with a cash-crunch amid a drawn-out strike and ongoing quality control (to put it nicely) issues.

In a memo to employees, CEO Kelly Ortberg noted that the reductions will include executives, managers and employees, warning that:

“Our business is in a difficult position, and it is hard to overstate the challenges we face together."

Boeing ended 2023 with 171,000 employees.

The company said it expects to report third quarter revenue of $17.8 billion, and a loss per share of $9.97, according to preliminary figures.

The company unveiled the measures and the earnings figures as it seeks to get its negotiations with labor unions back on track.

Boeing has made two offers for higher wages, both of which were turned down by workers.

About 33,000 employees at its main Seattle-area facilities have been on strike for a month now, devastating production and draining Boeing’s reserves.

The latest talks collapsed earlier this week, [zerohedge.com] with no clear path when and how they might resume.

Boeing shares tumbled after hours, erasing the day's gains...

Ortberg also said the company has notified customers that the first deliveries of the 777X are now expected in 2026, citing the ongoing work stoppage and flight test pause.

Read the full press release below [boeing.com]:

"While our business is facing near-term challenges, we are making important strategic decisions for our future and have a clear view on the work we must do to restore our company," said Kelly Ortberg, Boeing president and chief executive officer.

"These decisive actions, along with key structural changes to our business, are necessary to remain competitive over the long term. We are also focusing on areas that are critical to our future and will ensure we have the balance sheet necessary to invest, support our people and deliver for our customers."

Commercial Airplanes expects to recognize pre-tax earnings charges of $3.0 billion on the 777X and 767 programs. The company now anticipates first delivery of the 777-9 in 2026 and the 777-8 freighter in 2028, resulting in a pre-tax earnings charge of $2.6 billion. This schedule and resulting financial impact are based on an updated assessment of the certification timelines to address the delays in flight testing of the 777-9, as well as anticipated delays associated with the IAM work stoppage. Commercial Airplanes also plans to conclude production of the 767 freighter and recognize a $0.4 billion pre-tax charge on the program, which also reflects impacts from the IAM work stoppage. Beginning in 2027, the company will solely produce 767-2C aircraft in support of the KC-46A Tanker program. Commercial Airplanes expects to report third quarter revenue of $7.4 billion and operating margin of (54.0) percent.

Defense, Space & Security expects to recognize pre-tax earnings charges of $2.0 billion on the T-7A, KC-46A, Commercial Crew, and MQ-25 programs. The T-7A program pre-tax charge of $0.9 billion was driven by higher estimated costs on production contracts in 2026 and beyond. The KC-46A program pre-tax charge of $0.7 billion reflects the decision to conclude production on the 767 freighter and impacts of the IAM work stoppage. Results also include unfavorable performance on other programs. Defense, Space & Security expects to report third quarter revenue $5.5 billion and operating margin of (43.1) percent.

Finally, a quick thought for all the other corporations out there...

*BOEING PRELIM 3Q REV. $17.8B, EST. $18.58B *BOEING EXPECTS TO RECOGNIZE ABOUT $5 BILLION EARNINGS CHARGES going woke was not such a great idea https://t.co/rF33WdGSgz [t.co]pic.twitter.com/cwmw6izvsH [t.co]

— zerohedge (@zerohedge) October 11, 2024 [twitter.com]

Live by the capitalist sword, DEI by the socialist sword...

Loading...

In what some have called a panic/desperation negotiating tactic, Boeing has announced (late on a Friday afternoon) that it will slash its workforce by 10% as the pummeled planemaker struggles with a cash-crunch amid a drawn-out strike and ongoing quality control (to put it nicely) issues.

In a memo to employees, CEO Kelly Ortberg noted that the reductions will include executives, managers and employees, warning that:

“Our business is in a difficult position, and it is hard to overstate the challenges we face together."

Boeing ended 2023 with 171,000 employees.

The company said it expects to report third quarter revenue of $17.8 billion, and a loss per share of $9.97, according to preliminary figures.

The company unveiled the measures and the earnings figures as it seeks to get its negotiations with labor unions back on track.

Boeing has made two offers for higher wages, both of which were turned down by workers.

About 33,000 employees at its main Seattle-area facilities have been on strike for a month now, devastating production and draining Boeing’s reserves.

The latest talks collapsed earlier this week, [zerohedge.com] with no clear path when and how they might resume.

Boeing shares tumbled after hours, erasing the day's gains...

Ortberg also said the company has notified customers that the first deliveries of the 777X are now expected in 2026, citing the ongoing work stoppage and flight test pause.

Read the full press release below [boeing.com]:

"While our business is facing near-term challenges, we are making important strategic decisions for our future and have a clear view on the work we must do to restore our company," said Kelly Ortberg, Boeing president and chief executive officer.

"These decisive actions, along with key structural changes to our business, are necessary to remain competitive over the long term. We are also focusing on areas that are critical to our future and will ensure we have the balance sheet necessary to invest, support our people and deliver for our customers."

Commercial Airplanes expects to recognize pre-tax earnings charges of $3.0 billion on the 777X and 767 programs. The company now anticipates first delivery of the 777-9 in 2026 and the 777-8 freighter in 2028, resulting in a pre-tax earnings charge of $2.6 billion. This schedule and resulting financial impact are based on an updated assessment of the certification timelines to address the delays in flight testing of the 777-9, as well as anticipated delays associated with the IAM work stoppage. Commercial Airplanes also plans to conclude production of the 767 freighter and recognize a $0.4 billion pre-tax charge on the program, which also reflects impacts from the IAM work stoppage. Beginning in 2027, the company will solely produce 767-2C aircraft in support of the KC-46A Tanker program. Commercial Airplanes expects to report third quarter revenue of $7.4 billion and operating margin of (54.0) percent.

Defense, Space & Security expects to recognize pre-tax earnings charges of $2.0 billion on the T-7A, KC-46A, Commercial Crew, and MQ-25 programs. The T-7A program pre-tax charge of $0.9 billion was driven by higher estimated costs on production contracts in 2026 and beyond. The KC-46A program pre-tax charge of $0.7 billion reflects the decision to conclude production on the 767 freighter and impacts of the IAM work stoppage. Results also include unfavorable performance on other programs. Defense, Space & Security expects to report third quarter revenue $5.5 billion and operating margin of (43.1) percent.

Finally, a quick thought for all the other corporations out there...

*BOEING PRELIM 3Q REV. $17.8B, EST. $18.58B *BOEING EXPECTS TO RECOGNIZE ABOUT $5 BILLION EARNINGS CHARGES going woke was not such a great idea https://t.co/rF33WdGSgz [t.co]pic.twitter.com/cwmw6izvsH [t.co]

— zerohedge (@zerohedge) October 11, 2024 [twitter.com]

Live by the capitalist sword, DEI by the socialist sword...

Loading...

nobody-buys-planes-that-crash dept.

Boeing Union Fight Hits Turbulence, Files Unfair Labor Practice [soylentnews.org]:

Labor strikes at Boeing's commercial jet factories are approaching the one-month mark, with no end to the paralyzing labor action. This seriously threatens Boeing's credit rating, which faces mounting downgrade risks [zerohedge.com] from investment grade to junk status from multiple credit ratings agencies as cash reserves dwindle.

Quartz News [qz.com] reported overnight that Boeing filed unfair labor practice charges with the National Labor Relations Board (NLRB) against the International Association of Machinists and Aerospace Workers, claiming union bosses have been bargaining in bad faith on behalf of the 33,000 striking union members.

Boeing wrote in a statement that IAM negotiators "did not seriously consider" the latest offer earlier this week, which included a 30% wage bump over four years, up from 25%, and other benefits.

"The union's public narrative is misleading and making it difficult to find a solution for our employees," Boeing said in the filing to the NLRB, adding the union had engaged in a "pattern of bad faith bargaining." The aerospace giant retracted its "best and final" offer on Tuesday.

Boeing Commercial Airplanes President and CEO Stephanie Pope wrote in a memo [zerohedge.com] earlier this week, "Unfortunately, the union didn't seriously consider our proposals. Instead, the union made non-negotiable demands far in excess of what can be accepted if we are to remain competitive as a business."

IAM leaders said the talks collapsed when Boeing negotiators refused to increase wages over the contract's lifespan or reinstate the defined benefit pension.

As the strike eclipses one month in just a few short days, troubles keep piling up for Boeing. S&P Global Ratings placed the struggling planemaker on CreditWatch negative [zerohedge.com], citing mounting risks that its investment-grade credit rating would be slashed to junk.

"The CreditWatch listing reflects the increased likelihood of a downgrade if the strike persists toward the end of the year, further constraining the recovery in the company's cash flow generation and the company does not raise capital sufficient to meet its upcoming needs in such a way that does not increase financial leverage," S&P said.

S&P estimated the labor action costs Boeing $1 billion per month. They expect the target of producing 38 Max jets per month will be pushed to mid-2025.

There's also concern the planemaker will need to raise money via public equity markets (read more about dilution fears [zerohedge.com]) with its cash balance dwindling:

Boeing will likely seek incremental funding. We anticipate that Boeing will end 2024 with a cash balance below its $10 billion target if the strike continues through the fourth quarter and the company typically uses cash in the first quarter due to seasonal working capital build. Boeing also has approximately $4 billion of debt maturities due in April 2025. We believe the company will need to seek external capital to meet these demands. Based on its public comments, we assume Boeing is also open to potentially issuing additional equity. However, we believe the company remains exposed to higher-than-expected cash usage and adjusted debt for the next year or two, which could further delay the expected recovery in its credit measure to levels we view as consistent with the rating.

S&P concluded:

The CreditWatch with negative implications placement reflects our view that we could lower our ratings on Boeing if the strike continues, increasing costs and delaying the company's recovery in aircraft production and cash flow generation. We could lower ratings if the company fails to preserve its target cash balance, fund operating and working capital, and meet debt maturities without increasing leverage. We intend to resolve the CreditWatch placement by the end of the year.

Some Wall Street desks following this story are left pondering this question: Which will happen first—Boeing's credit downgrade from investment grade to junk or a deal with the IAM?

Loading...

Labor strikes at Boeing's commercial jet factories are approaching the one-month mark, with no end to the paralyzing labor action. This seriously threatens Boeing's credit rating, which faces mounting downgrade risks [zerohedge.com] from investment grade to junk status from multiple credit ratings agencies as cash reserves dwindle.

Quartz News [qz.com] reported overnight that Boeing filed unfair labor practice charges with the National Labor Relations Board (NLRB) against the International Association of Machinists and Aerospace Workers, claiming union bosses have been bargaining in bad faith on behalf of the 33,000 striking union members.

Boeing wrote in a statement that IAM negotiators "did not seriously consider" the latest offer earlier this week, which included a 30% wage bump over four years, up from 25%, and other benefits.

"The union's public narrative is misleading and making it difficult to find a solution for our employees," Boeing said in the filing to the NLRB, adding the union had engaged in a "pattern of bad faith bargaining." The aerospace giant retracted its "best and final" offer on Tuesday.

Boeing Commercial Airplanes President and CEO Stephanie Pope wrote in a memo [zerohedge.com] earlier this week, "Unfortunately, the union didn't seriously consider our proposals. Instead, the union made non-negotiable demands far in excess of what can be accepted if we are to remain competitive as a business."

IAM leaders said the talks collapsed when Boeing negotiators refused to increase wages over the contract's lifespan or reinstate the defined benefit pension.

As the strike eclipses one month in just a few short days, troubles keep piling up for Boeing. S&P Global Ratings placed the struggling planemaker on CreditWatch negative [zerohedge.com], citing mounting risks that its investment-grade credit rating would be slashed to junk.

"The CreditWatch listing reflects the increased likelihood of a downgrade if the strike persists toward the end of the year, further constraining the recovery in the company's cash flow generation and the company does not raise capital sufficient to meet its upcoming needs in such a way that does not increase financial leverage," S&P said.

S&P estimated the labor action costs Boeing $1 billion per month. They expect the target of producing 38 Max jets per month will be pushed to mid-2025.

There's also concern the planemaker will need to raise money via public equity markets (read more about dilution fears [zerohedge.com]) with its cash balance dwindling:

Boeing will likely seek incremental funding. We anticipate that Boeing will end 2024 with a cash balance below its $10 billion target if the strike continues through the fourth quarter and the company typically uses cash in the first quarter due to seasonal working capital build. Boeing also has approximately $4 billion of debt maturities due in April 2025. We believe the company will need to seek external capital to meet these demands. Based on its public comments, we assume Boeing is also open to potentially issuing additional equity. However, we believe the company remains exposed to higher-than-expected cash usage and adjusted debt for the next year or two, which could further delay the expected recovery in its credit measure to levels we view as consistent with the rating.

S&P concluded:

The CreditWatch with negative implications placement reflects our view that we could lower our ratings on Boeing if the strike continues, increasing costs and delaying the company's recovery in aircraft production and cash flow generation. We could lower ratings if the company fails to preserve its target cash balance, fund operating and working capital, and meet debt maturities without increasing leverage. We intend to resolve the CreditWatch placement by the end of the year.

Some Wall Street desks following this story are left pondering this question: Which will happen first—Boeing's credit downgrade from investment grade to junk or a deal with the IAM?

Loading...

Original Submission