Global ratings agency Fitch released a statement indicating that Boeing Co. has made notable strides in resuming production following a disruptive labor strike that had halted operations for over seven weeks. The strike, which began on September 13, 2024, involved approximately 33,000 unionized machinists from the International Association of Machinists and Aerospace Workers, primarily based in the Pacific Northwest. This work stoppage significantly impacted Boeing’s ability to manufacture its bestselling aircraft, including the 737 Max, and posed a severe financial challenge to the aerospace giant already grappling with a tumultuous year. Fitch’s assessment highlights early progress in production resumption, inventory management, and supply chain stabilization, offering a glimmer of optimism for Boeing’s recovery trajectory.
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The labor dispute, which concluded in early November 2024 after workers voted to accept a contract offering a 38% wage increase over four years, left Boeing with the daunting task of restarting its assembly lines. According to Fitch, the company has begun to address the backlog of legacy inventory—aircraft components and partially assembled planes that accumulated during the strike. This inventory reduction is a critical step as it frees up resources and space for new production cycles. Additionally, Boeing has worked to strengthen its supply chain, which had been strained by the stoppage and broader industry challenges, such as labor shortages and logistical delays. Fitch emphasized that these efforts signal an operational turnaround, albeit one that remains in its initial stages.
Boeing’s production woes stem from a strike that not only halted output but also exacerbated existing financial pressures. The company reported a staggering $6 billion loss in the third quarter of 2024, compounded by the inability to deliver planes and collect associated revenue. With half or more of a plane’s price typically paid upon delivery, the strike’s impact on cash flow was immediate and severe. Fitch’s report suggests that Boeing’s progress could pave the way for the company to achieve a production rate of 38 units per month by the third quarter of 2025, a target that would mark a significant recovery milestone. This projection aligns with Boeing’s broader goal of stabilizing its operations and restoring confidence among customers, regulators, and investors.
The road to recovery, however, remains fraught with challenges. Boeing has faced intense scrutiny following safety incidents, including a midair panel blowout on a 737 Max in January 2024, and continues to navigate regulatory oversight from the Federal Aviation Administration. The company also announced plans to lay off 10% of its workforce—approximately 17,000 employees—in October 2024, a move aimed at cutting costs amid ongoing losses. Despite these hurdles, Fitch’s analysis underscores Boeing’s proactive steps to address production bottlenecks and supply chain disruptions. The agency’s outlook reflects cautious optimism, noting that sustained progress could bolster Boeing’s financial position and competitive standing in the aerospace sector. Boeing’s efforts to resume production come at a pivotal moment. The company, under the leadership of new CEO Kelly Ortberg, who assumed the role in August 2024, is striving to reset its corporate culture and rebuild trust with stakeholders. Ortberg has emphasized the need for closer collaboration with labor and a focus on quality over quantity in aircraft manufacturing. Fitch’s recognition of Boeing’s early achievements suggests that these initiatives may be gaining traction, though the full extent of the recovery will depend on consistent execution and the absence of further disruptions. As Boeing works to ramp up production of the 737 Max and other models, the industry watches closely, aware that the company’s success—or failure—will ripple through global aviation markets. For now, Fitch’s assessment offers a measured endorsement of Boeing’s post-strike resilience, highlighting a potential turning point in a challenging chapter for the aerospace titan.