Boeing, a cornerstone of the Dow Jones Industrial Average, faced significant headwinds in 2024, leading to a substantial decline in its share price. This article delves into the key events that contributed to Boeing’s challenging year, from production setbacks and labor disputes to leadership changes and intense regulatory scrutiny.
An Alaska Airlines 737 Max lost a door plug mid-flight in January.
Early in 2024, Boeing encountered a major setback when an Alaska Airlines 737 Max experienced a mid-air incident involving a lost door plug. Investigations revealed that crucial bolts were missing from the aircraft upon leaving Boeing’s factory, raising concerns about the company’s manufacturing processes and quality control. This incident triggered a comprehensive review of Boeing’s operations and drew sharp criticism from airline executives.
The Federal Aviation Administration (FAA) responded by imposing production limits on the 737 Max, further compounding Boeing’s challenges. FAA Administrator Mike Whitaker indicated that it would take several months for Boeing to reach the permitted production rate of 38 jets per month.
Boeing's new CEO, Kelly Ortberg, toured factories, signaling a shift in priorities.
Amidst these difficulties, Boeing underwent a leadership transition. Dave Calhoun stepped down as CEO in March, and Kelly Ortberg, a seasoned industry veteran, assumed the role in August. Ortberg signaled a renewed emphasis on engineering excellence and a commitment to rebuilding trust. He relocated to Boeing’s historical headquarters in Seattle and actively engaged with factory workers.
However, challenges persisted. Boeing’s Starliner spacecraft encountered issues during a mission to the International Space Station, resulting in an extended stay for the astronauts onboard. In September, a seven-week strike by approximately 30,000 Boeing workers further disrupted production and delayed the 737 Max’s return to full operation.
Boeing workers picketed in October amidst tense union negotiations.
The strike also impacted the timeline for the highly anticipated 777X jet, with Ortberg announcing further delays. Adding to the difficulties, Boeing announced layoffs affecting 10% of its workforce. These setbacks contrasted sharply with the performance of Airbus, Boeing’s main competitor, which saw its stock price rise significantly during the same period.
Boeing delivered less than half the number of jets compared to Airbus, highlighting the extent of the company’s production challenges. Ortberg outlined a recovery plan focused on strengthening Boeing’s culture and operational efficiency, with a particular emphasis on empowering leadership on the factory floor.
Boeing's stock performance lagged behind its competitor, Airbus.
While 2024 proved to be a tumultuous year for Boeing, Ortberg’s leadership and strategic initiatives offer a potential pathway to recovery. 2025 will be a critical year for Boeing as it strives to overcome the challenges of the previous year and regain its position as a leader in the aerospace industry. The company’s ability to address production issues, navigate labor relations, and successfully launch new aircraft programs will be crucial to its future success.
