On Wednesday, Boeing CEO Kelly Ortberg addressed the ongoing challenges posed by the trade war between the United States and its trading partners, particularly focusing on the implications for China. Making his remarks ahead of the company’s quarterly earnings report, Ortberg communicated his commitment to shielding Boeing’s recovery efforts from these external pressures.
In a letter to Boeing employees, Ortberg detailed the company’s advances in four key areas of its recovery strategy, alongside observations regarding the potential impacts of current trade disputes. He expressed confidence that the company’s solid start to the year, coupled with robust demand for aircraft and a formidable backlog valued at over half a trillion dollars, should provide the necessary flexibility to navigate through these tumultuous times.
During a Q&A session following the earnings call, Ortberg conveyed optimism regarding the company’s overall strategy for the year, although he acknowledged that the situation with China might limit the gains derived from strong deliveries in the first quarter. “I feel really good about our overall plan for the year,” he stated.
CHINA BEGINS RETURNING BOEING AIRCRAFT TO US
Ortberg revealed that China is currently the only nation where Boeing has faced aircraft delivery challenges tied to tariffs from the Trump administration. He noted, however, that the company remains vigilant regarding possible retaliatory actions from Europe and is in frequent communication with the White House. “I don’t think a day goes by where we aren’t engaged with someone in the administration, including … Cabinet secretaries and up to POTUS himself,” Ortberg remarked.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BA | THE BOEING CO. | 172.05 | +9.69 | +5.97% |
Currently, Boeing is incurring a 10% tax on imports from nations such as Japan and Italy, although the company anticipates recovering some of these expenses through aircraft exports.
BOEING CEO SAYS COMPANY WON’T RAMP UP PRODUCTION YET, VOWS TO ‘GET IT RIGHT’
According to comments made during a recent Finance Newso interview, Ortberg noted that China has returned two out of three aircraft that were ready for delivery due to a halt in acceptance stemming from the trade dispute. Initially, Boeing had anticipated delivering around 50 aircraft to China this year, but Ortberg emphasized a pragmatic approach moving forward. “For those airplanes that haven’t been built yet, we’ll be looking to maybe redirect those to other customers,” he remarked. “For the airplanes that have been built, we call it remarketing. There’s plenty of customers out there looking for the Max aircraft.”
Throughout 2024, Boeing faced significant hurdles, including manufacturing quality control issues that led regulators to impose restrictions on production of the 737 Max, as well as a strike that disrupted operations late last year.
Ortberg stated that the company intends to cautiously ramp up production of the Boeing 737 Max this year, deeming it crucial for cash flow. He also indicated an ambition to conduct more test flights for Boeing’s troubled Starliner space program later in the year.
Reuters contributed to this report.
