Things aren’t getting better for Boeing

If Cuba Gooding Jr. asked Boeing to show him the money, he probably wouldn’t be too impressed.

On Friday, new Boeing CEO Kelly Ortberg announced the aerospace and defense giant will be taking a $5 billion charge this quarter in its commercial airplane and defense units, and laying off 10% of its workforce, or ~17,000 employees, in a bid to cut costs.

Ortberg also announced two product-line updates:

• Delivery of the first 777x jet, Boeing’s 777 mini-jumbo successor, has been pushed from 2025 to 2026, putting it now some six years behind schedule.
• Production of the civil 767 Freighter will cease in 2027, after the company builds and delivers its remaining orders.

Boeing and Wednesday’s child are both full of woe

The announcements come amid an ongoing and costly strike involving ~33,000 of the company’s machinists, which has now crossed the one-month mark. Boeing is losing ~$1 billion/month as a result of the work stoppage, according to ratings agency S&P, in large part because the company gets paid for half of what a plane costs after it delivers a customer's order.

And the woes don’t stop there. Regulatory concerns, lawsuits, a mishap involving Starliner that resulted in $125+ million in losses, and a recent leadership shakeup can also be added to the company’s list of issues.

👀 Looking ahead… It’ll most likely take Boeing a while to turn things around; the FAA’s top official has said it’s a matter of years, not months, before the company is stabilized.

Meanwhile, rating agencies have put Boeing on notice with a warning that it may slip into junk rating territory, a move that would make the planemaker the biggest so-called fallen angel in corporate US history, Bloomberg reports. Boeing currently has a cash pile of ~$10 billion, and analysts estimate it will need to raise between $10 billion–$15 billion to maintain its current rating – something the company is currently exploring.