Jamie Spencer
After a seven-week strike that disrupted operations at Boeing, newly appointed CEO Kelly Ortberg now faces the daunting task of repairing a divided and demoralized company. The narrow vote to accept Boeing’s latest contract offer may have ended the strike, but it has left deep fractures within the company that could delay critical initiatives.
More than 33,000 factory workers in the U.S. Northwest will return to work over the next week after accepting Boeing’s third contract offer by a slim margin. However, the strike has revealed internal divisions that run through every level of the company. According to insiders, including current and former Boeing officials, suppliers, and plant workers, the tension is not just between the board and the machinists but also among union members and between white-collar employees and factory workers.
The Strike Exposes Divides Within Boeing
The recent strike, sparked by frustrations over wages that have lagged behind inflation, has highlighted growing resentment within Boeing’s workforce. Over the past decade, while the company funneled tens of billions of dollars into share buybacks and awarded record executive bonuses, many workers have felt increasingly neglected. Boeing’s leadership miscalculated the anger brewing among its workers, according to managers and union leaders familiar with the situation.
Despite a 38% wage increase over four years in the accepted contract, only 59% of union members voted in favor of the deal, meaning thousands of workers will return to the assembly lines still dissatisfied. “The machinists have been there a long time and felt taken advantage of by management,” said Bill George, a former Medtronic CEO and executive fellow at Harvard Business School. “The number one issue now is separation of management from the people.”
Boeing’s Challenges: Production, Defense, and the 737 MAX
With workers returning, Ortberg now faces a series of pressing challenges. One of his immediate tasks will be ramping up production, which was brought to a halt during the strike. However, the deeper issue may lie in Boeing’s defense and space business, which has struggled in recent years, and the company’s supply chain, which is still reeling from the COVID-19 pandemic and previous safety and production crises.
Ortberg also faces what could be the defining moment of his tenure: planning a successor to the 737 MAX, Boeing’s once best-selling jet. The 737 MAX, while popular with airlines, has become emblematic of the company’s recent troubles, following two deadly crashes and a prolonged grounding. Restoring Boeing’s reputation and ensuring the success of its next aircraft will be a critical test for the new CEO.
In a memo to staff shared with reporters on Monday, Ortberg acknowledged the long road ahead but emphasized the need for collaboration. “We will only move forward by listening and working together,” he wrote.
Rebuilding Trust with Workers, Investors, and Customers
Rebuilding trust with Boeing’s workforce will be one of Ortberg’s biggest hurdles. Missteps during the strike negotiations have damaged confidence in the company’s leadership, and many employees remain frustrated that their wages have not kept pace with inflation. In contrast, Boeing has defended its use of share buybacks, citing strong demand for its products, but this has done little to placate its workers.
The company’s investors and customers will also be closely watching how Ortberg navigates the post-strike landscape. Boeing’s future hinges on its ability to restore production levels, repair its supply chain, and reinvigorate its defense and space divisions. Any missteps in addressing these issues could lead to further delays and potential setbacks for the company.
The Path Forward
The end of the strike marks the beginning of a new chapter for Boeing, but challenges remain. As Ortberg works to unite the workforce and restore Boeing’s reputation, his leadership will be tested on multiple fronts. Winning back the confidence of employees, investors, and customers will require decisive action, and how Ortberg handles these early months may shape Boeing’s future for years to come.
