With the strike over, Boeing tries to refocus on what made the company iconic

Boeing’s machinists are returning to work after a bruising strike. But the aerospace giant still has big long-term problems to solve if it’s going to recapture its leading position in the industry.

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Boeing’s machinists are returning to work. The union voted Monday to approve a new contract, ending a strike that dragged on for more than seven weeks. In the short run, that’s good news for Boeing. In the long run, the aerospace company still has big problems, and it could look very different in a few years, as NPR’s Joel Rose reports.

JOEL ROSE, BYLINE: Back in its heyday, Boeing seemed to defy gravity.

(SOUNDBITE OF ARCHIVED RECORDING)

JACK KING: Ignition sequence starts – 6, 5, 4, 3…

ROSE: The company built part of the most powerful rocket ever flown – the Saturn V – to launch the crew of Apollo 11 on their way to the first lunar landing.

(SOUNDBITE OF ARCHIVED RECORDING)

KING: Lift-off. We have a lift-off. Thirty-two minutes past the hour, lift-off on Apollo 11.

ROSE: But now, Boeing’s future in space is very much in doubt. The company lost $6 billion in the most recent quarter, partly because of the machinists’ strike that ended this week and also because of production problems across the company, from commercial airplanes to its defense and space business. Boeing’s new CEO, Kelly Ortberg, has warned that there are no quick fixes.

(SOUNDBITE OF ARCHIVED RECORDING)

KELLY ORTBERG: We’re better off doing less and doing it better than doing more and not doing it well.

ROSE: On a call with analysts last month, Ortberg said Boeing has to be leaner, more focused. Ortberg has announced that the company is laying off roughly 10% of its workforce. But beyond that, he hasn’t offered many details of what to expect.

(SOUNDBITE OF ARCHIVED RECORDING)

ORTBERG: Clearly, our core of commercial airplanes and defense systems are going to stay with the Boeing Company for the long run, but there’s probably some things on the fringe there that just distract us from our main goal here.

ROSE: Ortberg did not say exactly what those distractions might be, leaving financial analysts like Ron Epstein at Bank of America to draw their own conclusions.

RON EPSTEIN: If you look out by seven years from now, the company will be more focused on their core business, which is making things that fly.

ROSE: That includes airplanes, helicopters and military jets. But Epstein says Boeing may try to sell off some other assets. There’s a lot of speculation that Boeing will try to get out of space after well-documented problems with its Starliner program.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON: Separation confirmed. Starliner is now backing away from Station and starting its return to Earth.

ROSE: Without two NASA astronauts who were supposed to be at the International Space Station for eight days. Instead, they’ll catch a ride back to Earth with Boeing’s competitor, SpaceX, after eight months. The Wall Street Journal reported that Boeing has explored selling its NASA projects. Still, despite Boeing’s recent stumbles, there are some reasons to be optimistic about the company’s future.

GAUTAM MUKUNDA: For all of these catastrophes, as soon as Boeing gets its manufacturing in order, it will be a profitable company again.

ROSE: Gautam Mukunda is a lecturer at the Yale School of Management. He says demand for Boeing’s planes is still strong. So once the company starts building planes faster – especially its bestselling 737 MAX – its cashflow problems should get better. But in the long run, Mukunda says, Boeing needs to do more than that.

MUKUNDA: They are going to have to launch a blank-sheet airplane – a new airplane. It must happen.

ROSE: Analysts say Boeing needs a new plane partly to compete with its rival Airbus, which has been soaring ahead of Boeing in terms of market share. But Mukunda says there’s another important reason – to help Boeing attract talented engineers who want to work on ambitious projects.

MUKUNDA: That magnet of talent, of doing great things, used to be one of Boeing’s greatest assets, and now it just doesn’t exist.

ROSE: This is something Boeing CEO Kelly Ortberg is thinking about, too.

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ORTBERG: Boeing’s an airplane company. And at the right time in the future, we need to develop a new airplane. But we have a lot of work to do before then.

ROSE: Ortberg says Boeing needs to stabilize the business first. Financial analyst Ron Epstein says the company shouldn’t wait too long.

EPSTEIN: To keep their engineering muscle intact – I mean, if you don’t use it, you lose it.

ROSE: Epstein says Boeing’s leaders have been more focused on cutting costs and boosting profits instead of building better planes. Now, the company is paying for years of underinvestment. There’s even talk of bankruptcy, although Epstein thinks that’s unlikely because Boeing is too important – to the economy and national defense.

EPSTEIN: My worry is not that they fail. They’re too big to fail, but they’re not too big to be mediocre. I think the real trap is they just end up kind of muddling along as some sort of mediocre company.

ROSE: Boeing’s new CEO is saying the right things about recapturing what made the company iconic in the first place, Epstein says, but there’s no guarantee he can pull it off.

Joel Rose, NPR News, Washington.

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