Boeing shares fell 32% amid crises and production issues
Boeing announced workforce reduction, and expects cash burn in 2025
Rival Airbus up 11%, S&P 500 gained 23% in 2024
Dec 31 (Reuters) - U.S. planemaker Boeing BA.N is on track to be the biggest loser of 2024 in the Dow Jones Index, tumbling 32% as it bounced from one crisis to another.
Rival Airbus AIR.PA rose more than 11% for the year, and the benchmark S&P 500 .SPX gained more than 23% during 2024.
Boeing's shares opened the year at $257.50. However, a mid-air cabin panel blowout on Jan. 5 aboard a recently-delivered 737 MAX operated by Alaska Airlines ALK.N triggered investigations and a temporary grounding of the popular single-aisle airplane.
By the end of the month, the U.S. Federal Aviation Administration, citing safety and quality concerns, capped 737 production at 38 airplanes a month and the company's share price hovered around $211.
The FAA has not lifted the cap. Regardless, Boeing has struggled to produce close to its maximum-allowed 737 planes per month due to supply-chain problems, quality issues and a seven-week-long strike that temporarily shut down most of its commercial aircraft production, including the 737 program.
Boeing also continued to post massive losses from its commercial, military and space programs throughout the year. In July, the company announced a $4.7-billion deal to buy money-losing supplier Spirit AeroSystems SPR.N, which makes 737 fuselages. Spirit has been plagued by production quality problems as well.
In August, aerospace veteran Kelly Ortberg joined Boeing as CEO, replacing Dave Calhoun.
Ortberg's honeymoon period ended in early September, when about 33,000 production workers went on strike over a contract dispute that dragged into November, when the company's stock bottomed out at $137.07. During the strike, Ortberg announced plans to reduce Boeing's workforce by 10% and that the company expected to continue burning cash in 2025.
The promise to cut labor costs and the restart of 737 production in early December helped Boeing shares to partially recover to around $177 on Tuesday.
(Reporting by Dan Catchpole in Seattle; Editing by Rod Nickel)
((dan.catchpole@thomsonreuters.com; 651-231-1623))
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