Boeing to stop 767F production, lay off 17,000 employees
Boeing to recognise pre-tax earnings charges of $3 billion on 777X and 767 programmes while announcing Q32024 results.
Boeing announced plans to stop the production of 767 freighters, delivering the remaining 767 freighters ordered by customers, and then conclude production of the commercial programme in 2027.
The company will take a charge of $400 million on the programme, which will als include impact of work stoppage by the International Association of Machinists and Aerospace Workers (IAM), says an official release.
Boeing also said that the next-generation freighter, the 777-8F, will not be ready for commercial use till 2028
Kelly Ortberg, President and CEO, Boeing
Kelly Ortberg, President and CEO, Boeing in a message to employees shared "some difficult decisions and several programme updates:
*On the 777X programme, the challenges we have faced in development, as well as from the flight test pause and ongoing work stoppage, will delay our programme timeline. We have notified customers that we now expect first delivery in 2026."
*In BDS, our performance on fixed-price development programmes is simply not where it needs to be. We expect substantial new losses in BDS this quarter, driven by the work stoppage on commercial derivatives, continued programme challenges and our decision to complete production on the 767 freighter."
Ortberg also announced plans to reduce the workforce by 10 percent, or 17,000 people. "These reductions will include executives, managers and employees. Next week, your leadership team will share more tailored information about what this means for your organisation. Based on this decision, we will not proceed with the next cycle of furloughs."
Boeing is likely to recognise pre-tax earnings charges of $3 billion on the 777X and 767 programmes while announcing the Q32024 results on October 23. "The company now anticipates first delivery of the 777-9 in 2026 and the 777-8 freighter in 2028, resulting in a pre-tax earnings charge of $2.6 billion."
The company expects to report third quarter revenue of $17.8 billion, GAAP loss per share of ($9.97) and operating cash flow of ($1.3) billion after accounting for charges and the IAM work stoppage. Cash and investments in marketable securities totaled $10.5 billion at the end of the quarter, the release added.
