With the Boeing Machinists on strike all of October, the company delivered just 10 jets in Washington state in the month, the company disclosed Tuesday.
Boeing delivered four additional 787s from its nonunion South Carolina assembly plant. The total of 14 deliveries for the month was the lowest since the height of the pandemic four years ago.
Boeing said the 10 deliveries here — nine 737 MAXs and one 767 cargo plane — were handled by managers and others not on strike.
European competitor Airbus delivered 62 commercial jets last month, including 48 A320neos that compete directly with Boeing’s MAX.
As the whole industry struggles with supplier issues resulting in parts shortages, Airbus has a long way to go to reach its target of 770 jets delivered by year-end. Still, the strike caused Boeing to fall even further behind its rival.
Through October, Airbus had delivered 559 commercial jets while Boeing delivered 305.
Boeing said Tuesday “it will be several weeks before we fully restart airplane production because there are multiple steps to restarting a production line.”
Suppliers will take time to gear up again after they paused production. And as Boeing Machinists return from the strike, some will need retraining, especially the newer hires.
“Every employee will be reorientated to their role and safety requirements as they rejoin their teams,” Boeing said.
In addition, as the Federal Aviation Administration continues to monitor Boeing’s quality control, employees working at each jet program and assembly site must “identify potential hazards and risks and create plans to address them,” the company said.
Might some jet orders evaporate?
While the global supply of new airliners seems set to remain constrained for several years, demand remains strong — though some prior Boeing orders are in danger of slipping away due to its ongoing crisis.
In October, Boeing won 63 net new orders, 46 of which were for the MAX.
That included an order for 40 MAXs from Avia Solutions Group, a company that leases to airline customers not only planes but also flight crews and maintenance.
For the year through October, Boeing has won 141 net orders.
In the past three months, Boeing cut that total by nearly 200 orders. Those were prior orders now removed from the official backlog because the slide in Boeing’s delivery schedule has left the status of the contracts uncertain.
For the year through October, Airbus has won 730 net orders.
Boeing employees will learn Wednesday who will lose their jobs in mid-January in the round of layoffs Boeing announced last month. The cuts will be broadly spread across the company and, despite some expectations earlier, engineers and production workers won’t be exempt.
On an earnings call late last month, new Boeing CEO Kelly Ortberg said that to “reset priorities and create a leaner, more focused organization,” a 10% workforce cut would target overhead and “nonessential” positions, not front-line workers designing and building airplanes.
“We’re going to really focus this workforce reduction in streamlining those overhead activities, consolidating things that can be consolidated,” he said.
“I wouldn’t think of it like we’re going to take people off production or out of the engineering labs,” Ortberg added. “That’s not our intent.”
But a Boeing senior engineering manager in St. Louis said the cuts in the works target a roughly 10% reduction across the engineers supporting military programs, including the F-15 and F/A-18 jet fighters and the Navy’s P-8 submarine hunter, which is built in Renton with military systems installed in Seattle.
Those engineering organizations will shrink, said the manager, who asked not to be identified to protect his job. “If the idea in Kelly’s mind is cutting overhead and programs will not be impacted, that’s not what’s happening.”
He said research and development work, and production programs, “will all bleed a little.”
Still, non-front-line positions will suffer bigger losses.
White-collar staff working remotely may be particularly targeted as Ortberg tries to get the workforce connected and aligned with his new direction.
A manager of a small team of about 15 people, all working remotely — and ironically focused on ways to improve efficiency in program management — told one employee to expect a 30% cut in his team.
“If we are not holding a wrench, if we’re considered overhead, it’s about 30%,” said the employee, who also asked not to be identified to protect his job. The reduction for “people working on planes might be less than 5%.”
Boeing decided not to lay off Machinists during the strike, which could have complicated negotiations. However, with the strike ending Nov. 4, some Machinists may also be cut even though Boeing now desperately needs to increase production rates and bring in cash.
Boeing hired mechanics aggressively over the past two years in anticipation of higher production rates that have not materialized.
Before the blowout of a MAX fuselage panel on Alaska Airlines flight 1282 in January, Boeing had targeted delivering 38 MAXs a month out of the Renton factory by year-end. That rate is now pushed into the second half of next year.
With all Machinists back at work as of Tuesday, production is expected to ramp up only slowly.
Suppliers will take time to gear up again. Some newer hires will have to go through retraining.
And the Federal Aviation Administration put Boeing on notice this week that it must ramp up carefully and methodically to maintain safety and quality.
The FAA in a statement said it “will further strengthen and target our oversight as the company begins its return-to-work.”
Still, Jon Holden, president of the Machinists union 751, in a news conference on the night the strike ended, said “layoffs right now would be very shortsighted.”
With a current order backlog of almost 5,500 airplanes, he said “It’s important to get our membership back in the factories, build the (production) rates, and start delivering airplanes.”
“They need us to build them,” Holden added. “I hope the company can reconsider.”