Turbulent Year for Boeing: Crisis After Crisis
The US aerospace giant Boeing has had a dismal 2024, with its stock plummeting 32% amidst a series of crises that have shaken investor confidence. Meanwhile, its European rival Airbus has seen its shares soar by over 11%, and the S&P 500 benchmark has gained more than 23% during the same period.
Production Woes and Safety Concerns
Boeing’s troubles began in early January when a mid-air cabin panel blowout occurred on a recently delivered 737 MAX operated by Alaska Airlines. The incident triggered investigations and a temporary grounding of the popular single-aisle airplane. By the end of the month, the US Federal Aviation Administration (FAA) had capped 737 production at 38 planes per month, citing safety and quality concerns. The company’s share price took a hit, hovering around $211.
Supply Chain Issues and Strike
Despite the cap, Boeing has struggled to produce even close to its maximum-allowed 737 planes per month. Supply-chain problems, quality issues, and a seven-week-long strike that temporarily shut down most of its commercial aircraft production, including the 737 program, have all contributed to the company’s woes. The strike, which involved around 33,000 production workers, lasted from September to November and saw the company’s stock bottom out at $137.07.
New Leadership and Restructuring Efforts
In August, aerospace veteran Kelly Ortberg took the reins as Boeing’s CEO, replacing Dave Calhoun. However, Ortberg’s honeymoon period was short-lived, as the strike and production issues continued to plague the company. In an effort to cut labor costs, Ortberg announced plans to reduce Boeing’s workforce by 10% and warned that the company expected to continue burning cash in 2025.
Partial Recovery
The promise to cut labor costs and the restart of 737 production in early December have helped Boeing shares to partially recover, with the stock price rising to around $177 on Tuesday. However, the company still has a long way to go to regain investor confidence and overcome its production and financial challenges.
A Challenging Road Ahead
Boeing’s struggles are far from over, with the company facing significant hurdles in the coming year. As it works to address its production and quality issues, it will also need to contend with the ongoing impact of the pandemic and intense competition in the global aerospace market. One thing is clear: Boeing’s road to recovery will be long and arduous.
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