Boeing CEO Dave Calhoun speaks with family members of those killed in the Ethiopian Airlines Flight 302 and Lion Air Flight 610 crashes hold up photographs of their loved ones as he arrives for a Senate Homeland Security and Governmental Affairs Investigations Subcommittee hearing on Boeing's broken safety culture on Capitol Hill on June 18, 2024 in Washington, DC. Calhoun says he is "here to take responsibility" as he testifies before the Senate to discuss ongoing quality and safety issues after a new 737 Max 9 airplane's door panel blew out mid-flight during an Alaska Airlines flight in January. Andrew Harnik/Getty Images
Following financial and reputational damage from 737 Max crashes, Boeing has vowed to provide a comprehensive plan to restore its standing as a leader in aerospace manufacturing.
According to CNBC, the ambitious recovery strategy includes enhanced oversight, improved safety protocols, and investment in worker training, particularly for those hired during recent pandemic-related buyouts and layoffs.
The crisis came to a head on January 5, 2024, when a door plug on a Boeing 737 Max 9 detached mid-flight, revealing serious production flaws. While no one was injured, the incident revived concerns about Boeing's commitment to safety, which invited skepticism among regulators, airlines, and the public.
In response, Boeing has taken decisive actions. The company has reached a deal to buy back Spirit AeroSystems, its troubled fuselage supplier, aiming to eliminate production issues.
According to VCPost, Boeing has also agreed to a plea deal with the Justice Department related to a conspiracy charge tied to the 737 Max crashes. Critics have labeled the agreement a "sweetheart" deal, but it could spare Boeing from a protracted criminal trial. If approved by a judge, the plea deal would also mark Boeing as a felon, further complicating its efforts to rehabilitate its image.
Boeing's road to recovery will not be financially easy, considering it has not posted an annual profit since 2018, and its stock price has plummeted nearly 30% this year. From a peak of $440.62 in March 2019, just before the second Max crash, shares now trade around $185.
CNBC reported that the company is expected to burn approximately $8 billion in cash in the first half of 2024, according to the company's finance chief, Brian West.
Boeing's next quarterly results are due on July 31.
At the present, production delays remain, worsened by increased FAA scrutiny. Boeing delivered 175 planes in the first half of 2024, trailing behind Airbus, which delivered 323. These delays have frustrated major airlines like Southwest, United, and American, and have financially strained Boeing, with compensation for delays often inadequate.
Boeing's troubles are rooted in a series of decisions spanning decades. From the 1997 merger with McDonnell Douglas to extensive outsourcing and cost-cutting measures, critics argue that these choices have compromised the company's engineering standards and quality control.
Looking ahead, Boeing is working to mend its reputation and stabilize its operations. The recovery plan involves not only addressing immediate issues but also positioning the company for future success.
Analysts suggest that introducing new aircraft programs and focusing on long-term innovation could help Boeing regain its footing and attract top talent in a competitive industry.
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