Boeing is facing one of the toughest times in its history. 33,000 union members recently walked off the job after rejecting the company’s latest contract offer. The strike has only added to the company’s growing list of problems, including 737 Max production issues, financial losses and declining employee morale.
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The union members, most of whom live in Washington state, rejected a proposal to raise wages by 25 percent over four years, after pushing for a 40 percent increase. Boeing shares have fallen more than 6 percent on the rejection, and analysts warn that ratings agencies could downgrade the company’s debt to junk status.
Boeing’s new CEO, Robert Kelly Ortberg, is facing a turbulent time after recently buying a $4.1 million home in Seattle. He took the job after the company posted a staggering $1.4 billion loss in the second quarter of 2024. Now he faces a strike that could jeopardize Boeing’s recovery.
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To address these issues, Boeing CFO Brian West has come up with several ways to cut costs, including halting new hiring, halting salary increases, reducing unnecessary travel and even considering temporary layoffs. Boeing also plans to cut back on supplier spending and stop buying its own planes, such as the 737 Max, 767 and 777 models.
While these measures may save Boeing money in the short term, experts like Jason Walker, a consultant with Thrive HR Consulting, warn that they could make matters worse in the long run, further damaging employee morale, which is already low. Walker noted, “Employees already have a negative view of management, and this is only going to make it worse. I think they’re really in a death spiral of their own making.”
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Boeing management is rushing to settle with the union and prevent further damage. West has indicated he wants to return to the negotiating table, and Ortberg is actively participating in the talks.
Aerospace consultant James Darcy warned that while ending the strike is essential for Boeing to resume aircraft deliveries and improve cash flow, the settlement terms “will do nothing to improve” the company’s long-term financial health.
Boeing is currently in a vulnerable position. For one of the world’s largest aerospace companies, the future looks bleak, given the growing distrust between management and employees, huge financial losses and unclear business practices. It remains to be seen whether Boeing can bounce back and regain the trust of both its employees and its customers.
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This article Boeing ‘in a death spiral of its own making’ according to a consultant because ’employees already have a negative view of management’ originally appeared on Benzinga.com
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