Boeing strike: The real cost of the work stoppage
Transcript:
Conway Gittens: I’m Conway Gittens reporting from the New York Stock Exchange. Here’s what we’re watching on TheStreet today.
Investors are taking some money off the table one day after the S&P 500 closed above 6,100 for the first time in history. American Express is on the radar. Quarterly profits at the credit card company jumped 12 percent as higher-income consumers whipped out that card during the holidays, but that number was a whisper below forecasts.
Related: Boeing thought it had a plea deal until a judge said otherwise
Turning to other business headlines, $4 billion. That’s how much money Boeing lost in the fourth quarter alone, according to preliminary results released by the company. The aerospace giant has been befuddled by a number of problems including quality concerns, labor tensions, problems at its space division, and a national port workers’ strike that led to supply chain hiccups.
That $4 billion loss is roughly triple what Wall Street was expecting, and puts Boeing on track to post a $12 billion loss for all of 2024. A loss of that sheer size matches the same historic loss of 2020. That 2020 historic loss was due to the unprecedented pandemic shutdown of air travel. This 2024 money-losing year, however, was nearly all of Boeing’s making.
Boeing has been bleeding billions since 2019 after two fatal plane crashes involving the 737 MAX airplane. Safety and quality concerns resurfaced in 2024 after a door panel blew-off a Boeing plane mid-flight, prompting a temporary grounding of the plane.
Then came the very expensive strike of 33,000 workers, which halted production for 7 weeks. Boeing took a fourth-quarter charge of nearly $1 billion to reflect the higher labor costs it agreed to.
All these problems led to fewer planes being delivered, which for Boeing, meant fewer billions of dollars flying into its bank account.
That’ll do it for your Daily Briefing. From the New York Stock Exchange, I’m Conway Gittens with TheStreet.
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