Janice R. Andrews
Boeing’s new CEO Kelly Ortberg faces a critical test as the company prepares to release earnings on October 23 – the same day 33,000 striking workers vote on a new contract proposal. The timing creates intense anticipation around both events, which could determine Boeing’s immediate future.
The contract offer includes an unprecedented 35% wage increase over four years, but worker acceptance remains uncertain. The previous deal was rejected in September despite union leadership endorsement. This time, union leaders have remained neutral, leaving the decision entirely to workers.
The five-week strike has severely impacted Boeing, reportedly costing about $100 million daily in lost revenue. The company risks a credit rating downgrade to junk status if the work stoppage continues, which would make borrowing more expensive and complicate its recovery efforts.
Ortberg, who became CEO in August 2024, has already taken significant actions, including a 10% workforce reduction and securing a $25 billion refinancing package. The strike’s resolution could mark a turning point for his leadership, according to industry analyst Richard Aboulafia.
The dispute reflects deeper issues within Boeing’s culture. Workers remain frustrated over stagnant wages and the 2014 shift from pensions to 401(k) plans. Ortberg has attempted to address these concerns through increased engagement with factory workers in Seattle.
Boeing’s financial situation is precarious. The company recently reported missing revenue estimates and faces $5 billion in charges across various programs. Third-quarter results showed a $1.3 billion cash outflow, contributing to a total cash drain exceeding $7 billion this year.
Even if workers approve the contract, recovery won’t be immediate. Analysts like Douglas Harned from Bernstein suggest production delays could extend into November due to the complexity of restarting operations.
The company’s challenges extend beyond the strike. Boeing’s stock has dropped 41% this year, reflecting broader concerns about production delays, supply chain issues, and quality control problems highlighted by whistleblower reports.
The October 23 vote represents more than just a labor dispute resolution – it’s a crucial moment that could determine Boeing’s recovery trajectory and shape Ortberg’s legacy as CEO.
