(Reuters) -Boeing CEO Kelly Ortberg laid out a turnaround plan on Wednesday, including a push for a “fundamental culture change,” as the struggling planemaker grapples with a crippling strike, mounting debt and heightened cash burn.
The company reported a loss of $6.17 billion in the third quarter, bringing its nine-month loss to nearly $8 billion as its commercial and defense businesses were hit by a raft of charges.
Boeing (NYSE:) shares were up 0.2% in choppy premarket trading.
In a letter, Ortberg stressed the need for improving performance in its defense business and its 737 MAX and 777 programs while broadly stabilizing Boeing, which is “at a crossroads” after lapses in its performance disappointed customers and eroded trust.
“This is a big ship that will take some time to turn, but when it does, it has the capacity to be great again,” Ortberg told the planemaker’s employees in a message containing prepared remarks for his first earnings call as CEO.
Ortberg’s call to arms follows sweeping plans for significant downsizing announced earlier this month as a strike by about 33,000 workers that has dragged on for more than a month hit production of models including its best-selling 737 MAX jet.
The former Rockwell Collins (NYSE:) executive, who took the helm of the U.S. planemaker in August, said he was hopeful that a new contract proposal being voted on Wednesday by more of the striking workers would be approved, though analysts say ratification is not certain.
It is a crucial day for the planemaker, which was already struggling with the fallout from a regulator-imposed cap on production of MAX aircraft following a harrowing mid-air door panel blowout.
Ortberg said in his remarks that culture change was discussed at a recent meeting with top company executives.
“We need to prevent the festering of issues and work better together to identify, fix and understand root cause(s),” Ortberg said. “I’ve already introduced a much more detailed business cadence to drive this across the organization and this process of change is underway.”
But even if the strike ends, restarting production of 737 MAX as well as 767 and 777 widebodies will be a fresh challenge given the supply chain is still struggling in some pockets.
Boeing will also have to convince suppliers who have announced furloughs and put off investments over the last few weeks, to now reverse course and support its production plans.
“It’s much harder to turn this on than it is to turn it off,” Ortberg said, referring to its factories and the supply chain.
He noted that Boeing had a “lot of work to do” before developing a new airplane.
“This includes stabilizing our business, improving execution on the development programs, streamlining the portfolio to do what we do well and restoring the balance sheet so that we do have a path to the next commercial aircraft,” Ortberg said.
Ortberg did not address a possible capital raise, which Reuters has reported could be around $15 billion.
Boeing on Wednesday reported a quarterly cash burn of $1.96 billion, compared with a cash burn of $310 million, a year ago.
Adjusted loss per share widened to $10.44.
Quarterly revenue fell 1% to $17.84 billion.
