Boeing 'In A Death Spiral Of Their Own Making' According To A Consultant As 'Employees Already Have A Dim View Of Management'

Boeing is facing one of the toughest times in its history. Recently, 33,000 union workers left the job after rejecting the company's latest contract offer. The strike has only added to the company’s growing list of problems, such as the 737 Max production issues, financial losses and sinking employee morale.

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The union members, most of them based in Washington state, turned down a proposal to raise wages by 25% over four years, as they were pushing for a 40% increase. Boeing’s stock has dropped by over 6% due to the rejection and analysts are warning that rating agencies may lower the company’s debt to junk status.

Robert Kelly Ortberg, Boeing’s new CEO, is entering a turbulent time after recently purchasing a $4.1 million home in Seattle. He assumed the position following the company’s staggering $1.4 billion loss in the 2024 second quarter. Now, he faces a strike that could jeopardize Boeing’s chances of recovery.

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To address these problems, Boeing’s CFO Brian West has devised several ways to cut costs, such as stopping new hiring, halting raises, reducing unnecessary travel and even considering temporary layoffs. Boeing also plans to spend less on suppliers and stop buying its own planes, such as the 737 Max, 767 and 777 models.

While these measures could help Boeing save money in the short term, experts like Jason Walker, a consultant from Thrive HR Consulting, warn they could make things worse in the long run, as they could further damage employee morale, which is already low. Walker noted, “Employees already have a dim view of management and this is just going to make it worse. I think they are really in a death spiral of their own making.”

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The Boeing management is rushing to reach a settlement with the union and prevent more harm. West has indicated that he wants to return to the negotiating table and Ortberg actively participates in the discussions. 

An aerospace advisor, James Darcy, cautioned that although resolving the strike is essential for Boeing to resume aircraft deliveries and enhance cash flow, the settlement conditions “will do nothing to help” the company’s long-term financial health.

Boeing is currently in a vulnerable situation. For one of the biggest aerospace companies in the world, the future appears difficult, given the mounting mistrust between management and employees, enormous financial losses and an unclear course of action. It remains to be seen if Boeing can bounce back and win back the trust of both its staff and clients.

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