Boeing forced to take another $250 million charge on Starliner
Because of the continuing problems getting its Starliner manned capsule operational, Boeing has now taken another $250 million charge on the project, raising the total spent of its own money to $1.85 billion.
The company’s original fixed-price contract with NASA to deliver the capsule was $4.2 billion. The bulk of that won’t be paid until Starliner begins flying astronauts commercially, and NASA has now delayed that until 2026 at the earliest. The company’s new CEO, Kelly Ortberg, has now made it clear that he is focused on imposing changes to fix the bankrupt engineering management culture that has caused it so many failures in so many of its recent projects, not just Starlner. In his remarks announcing the company’s third quarter results, he said this:
The trust in our company has eroded. We’re saddled with too much debt. We’ve had serious lapses in our performance across the company which have disappointed many of our customers.
In addressing these issues Ortberg listed a whole range of changes, many of which focused on getting managers more closely involved in design and construction, or as he said, management needs “to be on the factory floors, in the back shops and in our engineering labs.”
Whether he will succeed is unknown. Its factory workers today rejected a new contract offer, continuing their now six-week strike that has halted work on company’s airplane business. In addition, Boeing reported a loss of $6 billion in that third quarter report.
One thing Ortbeg did make clear this week however: Boeing is not walking away from its Starliner contract with NASA. At a minimum it will complete that initial fixed price contract. Whether it will go on to fly more Starliner missions however Ortberg left open. I suspect he remains in negotiation with NASA over this issue.
Because of the continuing problems getting its Starliner manned capsule operational, Boeing has now taken another $250 million charge on the project, raising the total spent of its own money to $1.85 billion.
The company’s original fixed-price contract with NASA to deliver the capsule was $4.2 billion. The bulk of that won’t be paid until Starliner begins flying astronauts commercially, and NASA has now delayed that until 2026 at the earliest. The company’s new CEO, Kelly Ortberg, has now made it clear that he is focused on imposing changes to fix the bankrupt engineering management culture that has caused it so many failures in so many of its recent projects, not just Starlner. In his remarks announcing the company’s third quarter results, he said this:
The trust in our company has eroded. We’re saddled with too much debt. We’ve had serious lapses in our performance across the company which have disappointed many of our customers.
In addressing these issues Ortberg listed a whole range of changes, many of which focused on getting managers more closely involved in design and construction, or as he said, management needs “to be on the factory floors, in the back shops and in our engineering labs.”
Whether he will succeed is unknown. Its factory workers today rejected a new contract offer, continuing their now six-week strike that has halted work on company’s airplane business. In addition, Boeing reported a loss of $6 billion in that third quarter report.
One thing Ortbeg did make clear this week however: Boeing is not walking away from its Starliner contract with NASA. At a minimum it will complete that initial fixed price contract. Whether it will go on to fly more Starliner missions however Ortberg left open. I suspect he remains in negotiation with NASA over this issue.





