Boeing becomes its own ‘burning platform’

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A low water mark in the history of Rolls-Royce came in January 2023. Newly installed chief executive Tufan Erginbilgic called the venerable aerospace and defense giant a “burning platform”2”Burning platform” was first coined by then-Nokia CEO Stephen Elop in a 2011 memo to the electronics company outlining the strategic challenges it faced. — the result of strategic missteps that left it systematically lagging its competitors. “Every investment we make, we destroy value,” he told employees.

It was a rallying cry for a radical restructuring of the propulsion provider, which reduced its headcount as it rode through to a resurgent wave of long-haul widebody demand and new sales. Since that speech, Rolls’ stock is up almost 400% and the company has restarted work on next-generation engine demonstrators as part of its UltraFan program.

Boeing, now a week into a crippling strike by the 33,000 unionized machinists in its Commercial Airplanes division across Washington state, Oregon, Kansas and California, has begun the burning platform era of its existence under its own new CEO, Kelly Ortberg. Interviews with company and supplier leaders, managers, engineers and machinists paint a picture of growing strategic uncertainty and diminishing stability at a time when the opposite is required from the U.S. aerospace institution.

Related: Flight 1282’s postscript is prologue for Boeing’s Kelly Ortberg

The challenges facing Ortberg and the enterprise, all predating his August arrival, are almost too numerous to list and prioritize, but none can be solved without first ending the work stoppage that prevents Boeing from building its 737s, 767s and 777s. Multiple senior officials at the company described Ortberg’s approach as “very sober” and finally giving the company a “reckoning with reality” after years of CEO dismissals of its strategic challenges largely masked by executive claims of contrition and transparency in the face of the crises within its four walls.

In a bid to conserve cash, Boeing this week rolled out plans for deep cuts in discretionary spending and initiated plans for widespread furloughs. A senior Boeing executive, referencing the pandemic, said, “To me [it] feels like uncharted territory and 2020 at the same time.”

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