Boeing’s defense business continued bleeding in the third quarter of 2024 as troubled programs, fixed-price contracts, and an inability to reach a deal with thousands of striking machinists dragged down the company.
On Friday, the aerospace giant announced that it will cut 10% of its entire workforce, roughly 17,000 people, in order to “position” itself for the future. The dramatic move comes after 30,000 company workers rejected a new labor contract and stopped working last month—a strike with no end in sight.
In a letter to employees, CEO Kelly Ortberg noted “substantial new losses” for Boeing’s defense business, driven by work stoppage on military aircraft built at its factories, including the commercial-derived Air Force KC-46 tanker and Navy P-8 maritime patrol aircraft, continued program challenges, and the decision to end production of its 767 freighter, the basis of the KC-46, in 2027.
“Defense, Space & Security expects to recognize pre-tax earnings charges of $2 billion on the T-7A, KC-46A, commercial crew, and MQ-25 programs. The T-7A program pre-tax charge of $0.9 billion was driven by higher estimated costs on production contracts in 2026 and beyond. The KC-46A program pre-tax charge of $0.7 billion reflects the decision to conclude production on the 767 freighter and impacts of the IAM [International Association of Machinists and Aerospace Workers] work stoppage. Results also include unfavorable performance on other programs,” according to the company’s preliminary third-quarter results.
The head of Boeing’s defense sector, Ted Colbert, was pushed out of the job just a few weeks ago, and the company has yet to announce his successor.
The company will hold its third-quarter call on October 23.
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