During a recent conference, Boeing’s CEO, Kelly Ortberg, expressed gratitude toward Elon Musk, the leader of SpaceX which is a competing company in the spaceship industry. The reason being that Musk has contributed significantly in helping Boeing overcome the hindrances in the completion of the Air Force One presidential aircraft. The discussion occurred at the Barclays Industrial Select Conference, where Ortberg communicated to an audience of analysts and investors.
Ortberg revealed that SpaceX’s chief, Elon Musk, has been a major player in the advancement of the project. Musk’s involvement has been crucial in slashing costs and improving the delivery timeline for the new Air Force One, eradicating the potential for ongoing cost surpluses. This collaboration also signifies a chapter of positive relations and enhanced competition within the aerospace industry.
Nevertheless, Boeing’s defence division has been grappling with substantial financial complications. In the last quarter, they incurred pre-tax financial liabilities of about $1.7 billion spread across numerous programs. This is largely due to constant losses encountered with fixed-price agreements which they had absolutely committed to in the past ten years.
As a consequence of these financial revelations, Boeing saw a dip in share prices. A drop of 1.8%, to be specific, was recorded during morning transactions. The company is, however, confident that these numbers will improve sooner now with Musk’s guidance and cooperation on their side.
In line with Ortberg’s upcoming plans, he intends to welcome US Transportation Secretary Sean Duffy and Chris Rocheleau, the Acting Administrator of the Federal Aviation Administration, to Boeing’s Seattle plant. This purpose of this visit would be to get them acquainted with where the highest-grossing 737 MAX jet is produced. As per an insider, this assembly is planned to take place sometime in the upcoming month of March.
According to Ortberg, Musk has not just mentored them through the procedural requirements, but also contributed extensively to speeding up the output and delivery of the presidential aircrafts. Musk, being an innovative, astute individual, has been instrumental in distinguishing between the technical requirements and aspects that can be prioritized or streamlined.
Despite Musk’s assistance, Boeing’s defense department, responsible for the production of Air Force One, has incurred several charges caused by excess expenses on set price contracts. These occurrences seem to be a trend as it’s not the first time that such financial difficulties have been encountered. This has led to pressing concerns and escalating scrutiny over the project’s viability and final delivery timeline.
Earlier this week, a top-ranking administration official hinted at the possibility of further delaying the Air Force One project until 2029 or subsequent years. This news has created a ripple in the administration, raising questions on the effectiveness of Boeing’s current strategies and the role of external help.
President Trump has also expressed his unhappiness over the frequent delays by Boeing in delivering the Air Force One aircraft. Due to these circumstances, Trump hinted that his administration might have to explore other options. This proposition, as one can deduce, has been a cause for major concern for Boeing and has put them under significant pressure.
On the brighter side, Ortberg communicated positively regarding the supply chain for their 737 MAX aircraft. He believes it’s in a fairly decent condition, as Boeing plans an upshift in the production of this model to an output of 38 units a month by mid-2025. This perceived increase in productivity marks a silver lining amidst the ongoing pressures.
However, Boeing also had to tackle an unexpected incident of a fire breakout at a fastener producer factory in Pennsylvania earlier this month. Currently, the supply chain team of Boeing is analyzing the potential impacts this event could have caused. It’s a work in progress, and the results of this analysis could potentially cause some shift in Boeing’s immediate strategies.