NASA's Big Moon Mission Hiccup Will Cost Boeing Another $4 Billion in 2025

As the space industry continues to grow, so do the challenges and opportunities for companies like Boeing. The recent setback in NASA's Artemis program, specifically the Starliner spacecraft's issues, has raised concerns about the company's financial outlook. In this article, we will explore the potential impact of these challenges on Boeing's stock price and market capitalization, as well as the strategic changes the company might implement to mitigate future losses in its space division.

Boeing's Starliner program has faced significant setbacks, with the company reporting $1.85 billion in losses as of October 2024. The most recent charge of $250 million in the third quarter of 2024, following NASA's decision to use SpaceX for astronaut return, brings the total losses to about $1.85 billion. This has raised questions about Boeing's commitment to human spaceflight and the future of the Starliner program.



To mitigate future losses, Boeing's new CEO, Kelly Ortberg, has vowed to continue working on fixed-price programs like Starliner despite the losses. Ortberg acknowledged the need to better manage risks and de-risk these programs before they become cost overruns. Boeing is also evaluating ways to streamline its business, potentially discontinuing work in some areas outside of commercial aviation and defense.



To optimize its fixed-price contract strategy, Boeing should consider the following:

1. Risk Mitigation: Boeing should work with NASA to better understand and mitigate risks before they materialize. This could involve more thorough testing, contingency planning, and collaboration on risk-sharing strategies.
2. Cost Control: Boeing should improve its cost estimation and management processes. This could involve breaking down costs into smaller, more manageable components, and closely monitoring each phase of the project.
3. Flexibility in Contracts: Boeing could explore more flexible contract structures, such as cost-plus or time-and-materials contracts, which may provide more room for adjustments and risk mitigation.
4. Learning from Past Mistakes: Boeing should analyze the root causes of its Starliner issues and apply those lessons to future programs. This could involve investing in research and development to improve spacecraft design and manufacturing processes.
5. Diversification: Boeing should diversify its space portfolio to spread risk. This could involve pursuing smaller, less complex projects alongside its larger, fixed-price contracts.

In conclusion, Boeing faces significant challenges in its Starliner program, which could result in another $4 billion charge in 2025. To mitigate future losses, Boeing should focus on risk management, cost control, and strategic partnerships. By learning from past mistakes and diversifying its space portfolio, Boeing can better position itself for long-term success in the space industry.