The producer continues to face a troublesome restoration

Boeing 737 Max aircraft are assembled at the company's facility in Renton, Washington, on June 25, 2024.

Jennifer Buchanan | Via Reuters

Boeing begins another year of reconstruction.

A year ago, the company was once again in the spotlight over safety and quality concerns when a fuselage panel covering an unused emergency exit door exploded in mid-air from a nearly new Alaska Airlines Boeing 737 Max 9. The accident terrified the passengers on board, although no one was seriously injured and the plane made a safe emergency landing in Portland, Oregon.

No key bolts were installed before the plane left Boeing's 737 factory in Renton, Washington, a preliminary report from the National Transportation Safety Board found, in turn tarnishing the image of the top U.S. exporter.

Boeing's stock price has fallen more than 30% in the past 12 months, while the S&P 500 has risen nearly 27%.

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Boeing and S&P 500 performance

Boeing executives have made major changes in the past 12 months, ranging from senior management replacements, including a new chief executive, to more in-depth training for hundreds of factory workers, many of them new.

The company on Friday outlined its progress over the past year, including introducing random quality audits at factories. Boeing said it had “significantly” reduced defects on the 737 fuselages it manufactured Spirit AeroSystemswhich it buys back, and reduce so-called travel work, in which aircraft-building tasks are completed out of order to reduce defects. The manufacturer also said it had taken into account much of the employee feedback provided in meetings with management throughout the year.

Michael Whitaker, Administrator of the Federal Aviation Administration, testifies before the Subcommittee on Aviation of the House Committee on Transportation and Infrastructure at the Rayburn House Office Building in Washington, DC on September 24, 2024.

Kevin Dietsch | Getty Images

Since the accident, the Federal Aviation Administration has tightened its oversight of Boeing and limited production of its best-selling 737 Max jets, although production is still below that level. FAA chief Mike Whitaker, who announced his resignation on Jan. 20, warned the company Friday that “the increased oversight will remain.”

He said Boeing's turnaround was “not a one-year project.”

“What is needed is a fundamental cultural change at Boeing that focuses on safety and quality over profits. This will require sustained effort and commitment from Boeing and unwavering oversight from us,” Whitaker said in a statement.

Increasing losses, delivery delays

Boeing has not reported an annual profit since 2018.

This year saw the first of two fatal Boeing 737 Max crashes, killing 346 people – Boeing's worst crisis in recent memory. Both crashes involved a flight control system and the plane was grounded worldwide for nearly two years.

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Boeing's annual profit/loss.

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Other quality deficiencies emerged over the years, including delays in delivery of the 737 Max, 787 Dreamliner and the pair of 747s that will serve as Air Force One.

Since 2019, Boeing has lost more than $30 billion, and its new CEO is tasked with ensuring Boeing can ramp up production without flaws that have slowed deliveries in the past.

In August, the company hired Kelly Ortberg, a former Rockwell Collins CEO with three decades of aerospace experience, as Boeing's new CEO, replacing Dave Calhoun.

Weeks into Ortberg's term, Boeing machinists went on strike for nearly two months, a work stoppage that ended after they agreed to a new four-year contract with 38% wage increases. Some long-time workers called for pensions to be reinstated at Boeing, but that was not part of the new collective bargaining agreement.

Boeing CEO Kelly Ortberg visits the company's 767 and 777/777X program facility in Everett, Washington, on August 16, 2024.

Boeing | Marian Lockhart | Via Reuters

However, the strike resulted in production of most Boeing jets being halted, although factories have resumed production in recent weeks. This sets Boeing up for another year of focusing on stabilizing production to deliver jetliners to airlines before ramping up further, while Airbus continues to lead Boeing delivery volumes.

Boeing raised billions this fall to avert the crisis. Ortberg also said the company would cut 10% of its approximately 170,000 employees. Notices were sent out late last year. Ortberg said in October that the company needed to focus on its core businesses and would review its portfolio.

“I think we're better off … doing less and doing it better than doing more and not doing it well,” he said on his first earnings call in October.

He spent the first weeks of his term visiting factories and moving to the Seattle area, where most of Boeing's production is located, drawing praise from airline executives over the company's rolling aircraft deliveries during a travel boom after the pandemic.

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Bob Jordan, CEO of the all-Boeing 737 airline southwestwarned in an interview last month that Boeing's recovery was still “very early” but said he believed Ortberg understood the depth of the problems at the company.

“He doesn’t look at this as a Band-Aid. He sees this as a wholesale change from Boeing,” he said.