Ending the strike only stemmed the bleeding at Boeing (BA). Now, CEO Kelly Ortberg, just three months into the job, is faced with repairing a divided, demoralized, and drifting American corporate icon.
More than 33,000 factory workers in the U.S. Northwest will trudge back to work over the next week after they voted by a slim margin to accept Boeing’s third contract offer, ending a seven-week strike that brought Ortberg’s honeymoon at Boeing to a shuddering halt.
The strike has exposed divides that run right through the company, not just between the board and machinists, but also rifts within the union membership and resentment between white-collar staff and factory workers, according to interviews with more than 20 people with knowledge of Boeing’s operations, including current and former senior officials, suppliers, union leaders and plant workers.
These fractures could hamper and delay a host of urgent issues facing Ortberg and his leadership team, including restoring plane production, restructuring Boeing’s floundering defense and space business, and shoring up a supply chain creaking under the weight of years of safety and production crises at Boeing and a crippling pandemic, the people said.
That’s before Boeing gets to what could be Ortberg’s defining moment: preparing a successor to the 737 MAX, a jet that has been a best-seller with airlines but has also become synonymous with the company’s struggles in recent years.
In a memo to staff shared with reporters late on Monday, Ortberg recognized there was much work to do but stressed the company would “only move forward by listening and working together”.
Boeing declined to comment for this story, beyond Ortberg’s memo.
Winning back the confidence of workers, investors and customers will be a challenge after weeks of strike negotiations that have been characterized by missteps and miscalculations, according to Boeing managers, union leaders and factory workers.
Boeing’s leadership underestimated the anger among its workers who have seen their wages lag inflation over the last decade, overlapping with a period in which the company used tens of billions of dollars for share buybacks and record executive bonuses.
Boeing has said in the past that the buybacks were justified by strong demand for its products.
After rejecting two previous offers, only 59% of Boeing union members voted to accept Boeing’s latest offer, which included a 38% wage increase over four years, meaning thousands of workers will return to assembly lines unhappy with the new contract.