Boeing has had quite a dramatic weekend. First, on Saturday, Boeing's problem-plagued Starliner spacecraft finally returned to Earth — three months late and without its two astronauts after NASA deemed the trip too risky for human passengers. Then, on Sunday, Boeing averted a looming strike by reaching a tentative agreement with union leaders that promises a 25% pay increase over four years for thousands of Boeing employees in its U.S. Pacific Northwest commercial division.
Those union members will vote on Thursday to ratify the deal. If waved through it would mark a significant win for Boeing’s new CEO, Robert “Kelly” Ortberg, who took the helm just a month ago and inherited a business that is battling a quality control crisis, reputational damage, and ongoing regulatory scrutiny. Boeing shares are up 4% in early trading but have shed 35% of their value in the year to date, and are down 57% in the last 5 years.
Boeing’s business is obviously getting things airborne. But selling passenger-carrying airplanes, like the iconic 737, has actually been less than one-third of the company’s revenue so far this year. The union deal comes with a commitment that the company will build its next commercial model in the Seattle area.
Its defense, space, and security segment also pulled in $6 billion in Q2, though the troubled spacecraft division plays a relatively minor role compared to military aircraft and equipment sales. The company's services division, focused on maintenance and upgrades, contributed an additional $4.9 billion.
With a background as a mechanical engineer and years of experience in the aerospace supply chain, investors are hoping that Ortberg will be the one to get Boeing back on the right trajectory.
