Boeing CEO: Expect 'Pruning,' Not Major Restructuring, as Recovery Begins

As Boeing (BA) wraps up a challenging year marked by safety investigations, a machinists' strike, and significant financial losses, new CEO Kelly Ortberg is signaling a jet production and delivery recovery. Ortberg, who took the helm in August, is focusing on stabilizing the company's performance and restoring trust with stakeholders. In a recent interview, he emphasized that Boeing is not planning a major restructuring but rather a strategic "pruning" of its operations.

Ortberg's approach to turning around the aerospace giant differs from previous management strategies, with a focus on core operations and downsizing. He is seeking to raise at least $10 billion in cash by implementing widespread job reductions and exploring the sale of various assets. This strategy aims to generate essential cash flow while eliminating underperforming divisions and streamlining the company's portfolio.

One of the key areas Ortberg envisions for "pruning" is the reduction of the company's scope and concentration on core operations. This approach suggests that Boeing may be considering divesting or shutting down underperforming divisions or units that are not central to its core business. Additionally, Ortberg mentioned that Boeing is preparing to "streamline its portfolio in areas that are not core to our future," which could involve selling or shutting down non-core businesses, such as the recent sale of a small defense subsidiary specializing in military surveillance equipment.

Ortberg is also pushing for organizational changes, requiring executives to relocate closer to their operational units. This change in management structure is aimed at improving efficiency and reducing costs, which could also contribute to generating cash flow. By focusing on core operations and eliminating underperforming divisions, Boeing aims to improve its financial situation and restore trust with its stakeholders.



Strategic acquisitions could play a role in Boeing's plans, as the company looks to streamline its portfolio and focus on core operations. By acquiring or merging with other companies, Boeing could potentially gain access to new technologies, markets, or resources that could help it generate additional cash flow and improve its overall financial situation. However, it is important to note that any strategic acquisitions would need to be carefully evaluated to ensure they align with Boeing's long-term goals and do not create additional financial burdens.

In summary, Boeing's CEO Kelly Ortberg is focusing on a strategic "pruning" of the company's operations, rather than a major restructuring, to improve its financial health and restore trust with stakeholders. By concentrating on core operations, downsizing underperforming divisions, and potentially exploring strategic acquisitions, Boeing aims to generate essential cash flow and enhance its long-term competitiveness. As the company enters 2025, investors should closely monitor Boeing's progress in implementing these changes and restoring its financial stability.