Could be a decade before Boeing is back to normal, analyst says

After a few PR emergencies, federal scrutiny, legal proceedings, a machinists strike, and other business woes, it will likely be 10 years before Boeing can be back to business as normal.

That's according to Scott Hamilton, an aviation analyst with Leeham Company, an aviation news outlet. Hamilton told KUOW's Angela King that the labor contract Boeing's machinist union approved Monday is just one hurdle the company is facing. Boeing has a lot of work ahead to build itself back up.

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"The future is going to be bleak in the near term, because they are losing billions of dollars a year, and the cash flow is still negative," Hamilton said. "The cash flow is probably going to be negative well into next year ... Here at Leeham company, we think it'll take Boeing a decade to get itself back to its 2018 level, where everything was going smoothly, all the production lines were producing a good rates, they were making profits, good cash flow."

After rejecting multiple contract offers from Boeing, members of the machinist union IAM District 751 approved a labor contract with the company Monday evening by 59%, bringing an eight-week strike to an end.

"It's better than 50 plus one [percent], no question about that, but it still tells you that 41% of the members voted no," Hamilton noted, adding that the contract offer was a good one, and Boeing was never likely going to give in on a demand for a pension, a sticking point for many union members.

The contract approval even spurred a shoutout from President Joe Biden and Vice President Kamala Harris.

"This contract is also important for Boeing’s future as a critical part of America’s aerospace sector," Biden said in a statement, while also highlighting the fact that his administration intervened to help negotiations. (Labor Secretary Julie Su and National Economic Advisor Lael Brainard came to Washington state to meet with both parties.)

While Hamilton believes it will take Boeing about a decade to get back to smooth operations, the relationship between the company and its employees could take even longer.

"It's going to take decades, because the relationship between management and labor at Boeing has been toxic for a long, long time, and [new Boeing CEO Kelly Ortberg] is not going to come in and be able to walk the factory floor, and glad hand, and just say, 'Everything's fine. Let's do a reset.' Some of the way that Boeing handled these contract offers really irritated some of the members. This one was characterized as an ultimatum. Well, none of us like to be faced with an ultimatum. It's going to take him a long time to change the tone here."

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