Manufacturers still face tough recovery

boeing We are entering a new year of rebuilding.

A year ago, safety and quality concerns thrust the company back into the spotlight after a nearly new Boeing 737 Max 9 operated by Alaska Airlines flew into the air with a fuselage panel covering an unused emergency exit door. The incident frightened the passengers, but no one was seriously injured and the plane made a safe emergency landing in Portland, Oregon.

A preliminary report from the National Transportation Safety Board found that key bolts were not installed on planes before they left the Boeing 737 factory in Renton, Washington, again damaging the image of a major U.S. exporter. Ta.

Boeing stock is down more than 30% over the past 12 months, while the S&P 500 is up nearly 27%.

Boeing’s management has spent the past 12 months making major changes, from executive changes, including a new chief executive officer, to better training for hundreds of factory workers, many of whom are new. Ta.

The company on Friday outlined its progress over the past year, including the start of unannounced quality audits at its factories. Boeing announced that defects in its 737 aircraft have been “significantly” reduced. Spirit Aero SystemsIn order to reduce defects, the company is reducing so-called on-site work, in which aircraft manufacturing work is performed out of order. The company also said it addressed much of the employee feedback provided during sessions with management throughout the year.

Since the crash, the Federal Aviation Administration has increased scrutiny of Boeing and placed a cap on production of the company’s best-selling jet, the 737 Max, but production remains below that level. FAA Administrator Mike Whitaker, who said he would resign on Jan. 20, warned the company on Friday that “increased oversight will continue.”

He said Boeing’s turnaround “is not a one-year project.”

“What is needed is a fundamental cultural change at Boeing that prioritizes safety and quality over profits,” Whitaker said in a statement. “That will require sustained effort and commitment from Boeing and our unwavering oversight. ” he said.

Boeing has not posted an annual profit since 2018.

The year marked Boeing’s worst crisis in recent memory, with the first of two fatal 737 MAX crashes that killed 346 people. Both crashes involved flight control systems and the planes were grounded worldwide for almost two years.

Other quality deficiencies have also emerged over the years, delaying deliveries of aircraft such as the 737 Max, 787 Dreamliner, and a pair of 747s that serve as Air Force One.

Boeing has lost more than $30 billion since 2019, and the new CEO is tasked with ensuring Boeing can ramp up production without the defects that have delayed deliveries in the past.

In August, the company appointed Kelly Ortberg, a former Rockwell Collins CEO with 30 years of aerospace experience, as Boeing’s new CEO, replacing Dave Calhoun. I was welcomed as a person.

Weeks after Mr. Ortberg took over, Boeing’s machinists went on strike for nearly two months, but the work stoppage ended after the company approved a new four-year collective bargaining agreement with a 38% pay increase. Some longtime employees had asked Boeing to restore their pensions, but that was not part of the new labor agreement.

But while the factory has resumed production in recent weeks, the strike has halted production of most of Boeing’s jets. This will give Boeing another year to focus on stabilizing production to deliver jetliners to airlines before ramping up production further, while Airbus will continue to lead Boeing in deliveries. It turns out.

Boeing raised billions of dollars this fall to avert a crisis. Ortberg also announced that the company would cut 10% of its approximately 170,000 employees. Notifications started appearing at the end of last year. Ortberg said in October that the company needed to focus on its core business and would review its portfolio.

“I think it’s better to do fewer things and do them well than to do many things and do them poorly,” he said during his first earnings call in October.

He spent the first few weeks of his tenure visiting factories and relocated to the Seattle area, where much of Boeing’s production is concentrated. It won praise from airline executives who had been upset about the company delivering rolling aircraft during the post-pandemic travel boom.

Bob Jordan, CEO of Boeing 737 Airlines southwestwarned in an interview last month that Boeing’s recovery was “really in its early stages,” but said he thought Ortberg understood the depth of the company’s problems.

“He’s not thinking of this as a quick fix. He’s thinking of this as a wholesale change to Boeing,” he said.