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How Boeing Turned Things Around After Years Of Decline · INSIGHT TODAY

• 0:00
  Speaker 1: After years of safety crises, production delays, and quality defects,
• 0:04
  Speaker 1: Boeing finally seems to be turning a corner.
• 0:07
  Speaker 2: We had a really good close to twenty twenty five.
• 0:11
  Speaker 2: I think the important thing is that we saw free
• 0:13
  Speaker 2: cash flow positive again in the fourth quarter, so that's
• 0:17
  Speaker 2: really good news as we're starting this recovery.
• 0:20
  Speaker 1: The return to profitability is a crucial step in turning
• 0:23
  Speaker 1: the company around. Boeing's net orders for twenty twenty five
• 0:27
  Speaker 1: was for one hundred and seventy three planes. It's the
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  Speaker 1: first time since twenty eighteen it has outsold Airbus. Boeing
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  Speaker 1: delivered six hundred planes, also the most for the company
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  Speaker 1: since twenty eighteen, but still falls behind Airbus, who delivered
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  Speaker 1: seven hundred and ninety three. Investors are also optimistic. Boeing
• 0:45
  Speaker 1: stock has gained over forty percent over the last twelve months.
• 0:49
  Speaker 3: It's a long road back from a well share we say,
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  Speaker 3: rather dysfunctional culture, but they're making big progress. At the
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  Speaker 3: end of the day, it's all about delivering thirty seven
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  Speaker 3: Maxes and seventy eight sevens, because that's where the book
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  Speaker 3: of their revenue and profit come from. Right now, the.
• 1:12
  Speaker 1: COVID nineteen pandemic was the biggest crisis that aviation industry
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  Speaker 1: has ever faced. But Boeing's problems started in twenty eighteen
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  Speaker 1: and twenty nineteen, after two fatal crashes of its best
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  Speaker 1: selling narrow body plane, the seven thirty seven Max eight.
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  Speaker 4: Boeing executives have pretty much been focused on doing damage
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  Speaker 4: control for the last seven years. It was not just
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  Speaker 4: the seven thirty seven Max crashes. They also had a
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  Speaker 4: host of production flaws, both on the seven eight seven
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  Speaker 4: and on the seven thirty seven Max in the years
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  Speaker 4: after that.
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  Speaker 1: In twenty twenty four, a door plug blew off in
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  Speaker 1: Alaska Airlines Boeing seven thirty seven Max nine. An investigation
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  Speaker 1: found the aircraft was missing bolts, and the National Transportation
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  Speaker 1: Safety Board faulted Boeing for inadequate training, guidance and oversight.
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  Speaker 1: The FAA then capped production to the Max to thirty
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  Speaker 1: eight planes a month. A few months later, the company
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  Speaker 1: replaced its CEO with longtime aerospace veteran Kelly Orkburg. One
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  Speaker 1: of his first challenges was dealing with a massive labor strike.
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  Speaker 1: Boeing's defense business has also been struggling with delays.
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  Speaker 5: Change generally comes from the top down, So I think
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  Speaker 5: it's fair to give Kelly Orkberg. I got a credit
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  Speaker 5: for it. After the strike, his strategy was to just sorry,
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  Speaker 5: We're going to restart. He seems to be meeting with
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  Speaker 5: a very steady hand, trying to push things in the
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  Speaker 5: right direction.
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  Speaker 1: A large part of its recovery has been happening on
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  Speaker 1: the factory floor. At the end of twenty twenty five,
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  Speaker 1: it finalized its acquisition of fuselage maker Spirit Aero Systems,
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  Speaker 1: a unit Boeing previously owned and sold in two thousand
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  Speaker 1: and five. Bringing the company back under Boeing gives it
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  Speaker 1: more control over its supply chain.
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  Speaker 3: Most importantly, they made progress with the culture, getting it
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  Speaker 3: back towards their engineering roots, being led by an engineer
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  Speaker 3: and putting in place some really good new people. And
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  Speaker 3: of course as the military front too, winning the F
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  Speaker 3: forty seven in GAD program. That was their first sizeable
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  Speaker 3: military win without using your commercial gym hinner for many,
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  Speaker 3: many years.
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  Speaker 1: Commercial aircraft is the largest unit at Boeing. Airline customers
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  Speaker 1: have also noted the company's positive changes.
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  Speaker 4: Airline CEOs were very frustrated with Boeing's leadership. There wasn't
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  Speaker 4: a lot of transparency on the times that their planes
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  Speaker 4: were going to arrive they were delayed. But with Boeing specifically,
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  Speaker 4: we've seen CEOs have a change of tune. We've heard
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  Speaker 4: from Southwest Airlines, We've heard from United Airlines. They've said
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  Speaker 4: that Boeing has become under Orberg's leadership, more predictable. They
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  Speaker 4: know they have a better sense of when they're going
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  Speaker 4: to deliver their aircraft.
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  Speaker 1: Boeing's next challenge is keeping up with demand and delivering
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  Speaker 1: more airplanes. Since customers pay for the bulk of an
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  Speaker 1: aircraft upon delivery.
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  Speaker 2: Well, we've got six hundred billion dollars of backlog, so
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  Speaker 2: our focus right now is in delivering airplanes, ramping up
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  Speaker 2: production making sure those are high quality.
• 4:00
  Speaker 1: Airplan The Federal Aviation Administration recently said Boeing could increase
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  Speaker 1: seven thirty seven Max production output from thirty eight to
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  Speaker 1: forty two a month. Further increases would require FAA approval.
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  Speaker 1: Boeing has also been planning to ramp up with a
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  Speaker 1: fourth seven thirty seven Max production line for several years.
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  Speaker 3: Boeing had a really good year for orders, so the
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  Speaker 3: backlog keeps getting bigger in terms of production. However, they've
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  Speaker 3: got years several, you know, three four years where numbers
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  Speaker 3: weren't where they needed to be. Airbus is still ahead
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  Speaker 3: in production, but recently you've seen they had a few
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  Speaker 3: quality escapes as there euphimistically termed and they were forced
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  Speaker 3: to throttle back their expectation.
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  Speaker 1: Both Boeing and Airbus have been delayed delivering aircraft over
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  Speaker 1: the last few years. Airbus delivered seven hundred and ninety
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  Speaker 1: three planes in twenty twenty five, just short of its
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  Speaker 1: goal of eight hundred and twenty. But in October the
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  Speaker 1: company hit a huge milestone when the Airbus three to
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  Speaker 1: twenty family became the most delivered jet of all time.
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  Speaker 5: As you looked at demand for the A three twenty family,
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  Speaker 5: it's outstripped to seven through seven meaningfully over the last
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  Speaker 5: call it decade and a half. That they end up
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  Speaker 5: selling more airplanes this year than Airbus is good for them,
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  Speaker 5: but I mean it's just it's a year.
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  Speaker 1: Airbus has been delivering more planes annually since twenty nineteen.
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  Speaker 3: Airbus is huge advantage right now is that middle market jet,
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  Speaker 3: the eight three twenty one Neo. It's not a great jet.
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  Speaker 3: Boeing could beat it, but Boing doesn't have anything in
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  Speaker 3: that crass.
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  Speaker 1: The seven thirty seven Max ten has a range of
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  Speaker 1: three thousand, one hundred nautical miles and can seat a
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  Speaker 1: maximum of two hundred and thirty people versus the A
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  Speaker 1: three twenty one neo, which has a range of four thousand,
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  Speaker 1: seven hundred nautical miles and can seat two hundred and
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  Speaker 1: forty four passengers, and the Max ten has yet to
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  Speaker 1: be certified, so.
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  Speaker 3: Boing needs to start talking about what it's going to
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  Speaker 3: do to fight back against that, because they are way
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  Speaker 3: over five thousand, eighth three twenty one NEOs on backlog
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  Speaker 3: that give Airbus a huge advantage in volume and market
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  Speaker 3: chair moving forward.
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  Speaker 1: Narrowbody planes make up the majority of the world's commercial
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  Speaker 1: airline fleet, making it a critical point of competition between
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  Speaker 1: the only two companies that make them.
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  Speaker 5: In the narrowbody market, Airbus is winning in the why
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  Speaker 5: body Market's a little bit of a different story right
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  Speaker 5: in the wye body market, going does do better. The
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  Speaker 5: seven eight to seven from an airline perspective, a very
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  Speaker 5: successful airplane financially, it's been a little tricky over the years,
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  Speaker 5: and the Triple seven when they get that certified and
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  Speaker 5: the service it'll do really well too, its predecessor worth
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  Speaker 5: a well legged airplane.
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  Speaker 1: The certification of the Triple seven X has been delayed
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  Speaker 1: another year, resulting in the company taking a nearly five
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  Speaker 1: billion dollar charge for the delay.
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  Speaker 2: The issue we're having is in the certification process, getting
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  Speaker 2: the type inspection authorities to allow us to fly and
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  Speaker 2: get certification credit. We've fallen behind this summer as we've
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  Speaker 2: been anticipating those authorizations, and we had to step back
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  Speaker 2: and take a look at our go forward plan and
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  Speaker 2: come up with a higher com foot its plan, and
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  Speaker 2: that's what we did in that drove the charge.
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  Speaker 1: Analysts say, while the company does seem to be finally
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  Speaker 1: on the right path, it still has a long way to.
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  Speaker 3: Go in terms of recognizing they have a problem in
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  Speaker 3: getting themselves on the right path. That is enormous because
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  Speaker 3: for years before they denied there was any issue whatsoever.
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  Speaker 3: So I would say turned around culturally directionally absolutely, very impressive.
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  Speaker 3: But in terms of how you have to move forward
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  Speaker 3: from that, yeah, it's going to take some time to
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  Speaker 3: recover from fifteen or so rather poor years.
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  Speaker 5: It's really the first couple of innings of changes at
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  Speaker 5: the company. Is there a rush, No, But if they
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  Speaker 5: want to regain superiority in the narrow body market. Yeah,
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  Speaker 5: I have been a proponent that I think going to
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  Speaker 5: do a new airplane.
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  Speaker 3: I think they need a new plane to be a
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  Speaker 3: fifty to fifty player with the air Bus and maybe
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  Speaker 3: even beat them in terms of getting customers happy and
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  Speaker 3: making everybody confident that this is a new Boeing. I
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  Speaker 3: think it would be wonderful if they start talking about
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  Speaker 3: defining a new product and getting it launched sometime in
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  Speaker 3: the next say three years. Even just talking about that
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  Speaker 3: rather than denying the need for its existence, would be
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  Speaker 3: a major step forward.