Boeing reports $355 million loss amid door blowout crisis

Executives said the financial losses reflected a widespread slowdown in production as the company changed the way it made planes.

“In the short term, yes, we are facing difficult times,” Boeing Chief Executive Dave Calhoun said in a letter to employees. “Lower deliveries can be difficult for our customers and our finances. But safety and quality must and will be above all. »

It was the seventh consecutive quarterly loss for the struggling plane maker.

The January 5 explosion on an Alaska Airlines flight led to a broader reckoning for Boeing, which five years earlier had faced the global grounding of its signature 737 Max due to order problems flight attendants involved in two fatal plane crashes.

In recent months, the Federal Aviation Administration has repeatedly noted defects in the quality of Boeing’s production. Boeing’s commercial airlines chief Stan Deal has resigned. Calhoun plans to leave by the end of the year.

Federal regulators have barred the company from increasing production and slowed its production of 737 Max planes to work on quality control. As a result, Boeing delivered fewer completed planes: 83 in the first quarter, down 36% year-over-year.

Calhoun warned employees that production would slow even further as the company works on quality control.

“We are using this time, challenging as it is, to deliberately slow down the system, stabilize the supply chain, strengthen our factory operations and position Boeing to deliver the predictability and quality our customers demand over the long term.” , Calhoun said in the letter.

Boeing expects production to return to its “normal order” in the second half, Calhoun told CNBC on Wednesday. Ultimately, Boeing still hopes to achieve the long-term cash flow goals it set before the current wave of problems, he said.

Boeing’s production problems have spilled over into the airline industry. United Airlines said the emergency grounding of the Max 9 cost it $200 million in the first quarter. Southwest said it received fewer deliveries from Boeing than expected, which could force it to reduce the number of seats it offers and rethink its spending.