The Boeing Company (BA) 23 Oct 242024 Q3 Earnings call transcript

Thank you for standing by. Good day, everyone, and welcome to the Boeing Company's Third Quarter 2024 Earnings Conference Call. Today's call is being recorded. The management discussion and slide presentation plus the analyst question-and-answer session are being broadcast live over the Internet. [Operator Instructions] At this time, for opening remarks and introductions, I am turning the call over to Mr. of for President Boeing Vice Welch, Investor the Relations Company. Matt Mr. go ahead. please Welch,

Thank Boeing's described Financial are Welcome I morning. Vice Officer; you, good and Boeing's West, to as President Chief Welch, Executive with and Brian Boeing's and am and quarterly And me Ortberg, filings today's today and estimates and Chief boeing.com. Projections, in reminder, a Kelly discussion President and risks, Executive Officer. statement the presentation Matt involve slide call. earnings disclaimer you SEC can presentation. beginning follow at in including forward-looking the of those included and today's in our broadcast at goals the

the our also and presentation. you to non-GAAP to earnings disclosures We release in measures refer relating

Now I turn Ortberg. call will the over to Kelly

to for thanks call. everyone today's joining Thanks, Matt, and

an crossroads. the a we're company, the serious too many our in debt. had economy. trust in has eroded in token, But saddled same and the critical been I've clearly national be that start have customers. But the leading me to but constant company. much aerospace role We've at security company career which with ahead. across the Boeing we saying performance have overall the our lapses not or by our opportunities and one our spent always Let disappointed entire and just global honor to to my plays, A&D the by industry, that business it's has defense of The Boeing great

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to that really We have to big some the move us rocks need we get forward. company behind

so find back first a mind the committed have the and And union we task very employees' and team ending the I've the the was in hopeful package the restarting needs. our factories turn works them remain chain, We've to the that and let leadership the for back and much we the to to know we restoring supply feverishly working disconnected the the I we our today week it don't and everybody's harder work to is and IAM come on foremost to this will committed company become improving than meets it the it's future. company. Once forward employees relationship. on that can solution back, off. relationships with immediately job of I resetting put on focus The our so the allow to strike. we on been that is first getting get I'm so met to turn

this right. So critical that do absolutely it's we

safety the of area to restart, and return us back and detailed through everybody will quality in have plan stability and I'm that safety to plan. and work work a getting focus we is that to on quality forward Our looking really guide additional getting plan. One of the our to place, management critical system the implementation and is

As with increase system, part authority to we of stability and the we making progress to criteria be you already, measure the have of that continue that which our encouraged momentum. a we will need we're with this reviewed to necessary I'm production and use XXX gain plan rates. the FAA is is know, to

retaining support rating. investment-grade sheet rock best Another is managing credit big to our to the company stabilize balance our

we executing of confident to forward realities We And the path good have have and we're plan, investment-grade our retain a business that and a that our manage I'm plan. rating.

I've and So culture about talked stability.

platforms, our this the commercial MAX of business. the new BDS area of discipline third series or the execution our XXX whether The XXX programs the and in is on be improving derivatives

have on more to project, disciplined team and their bid the at Again, management is proactively. understanding This risks defense have business, effort. Clearly, on can to have things do managing to we that focused we critical before better in where we active this with their much management more more area management will difficult these including on contracts the better need and success be but on a of our and executing working the programs improvements we all include anticipating ensuring be risk of projects risk program much We the this customers chain and in Supply job phases happen. control. phase. they an the some

discuss a So new Boeing. lastly, building fourth for the to is future area

a we on of well to future, programs, time our While work the the airplane be which them. and have business, but focus at develop a so the development aircraft. We do challenges sheet today, need we're the in Boeing's a the new we the need and future stabilizing not with focused consolidation continue portfolio where areas balance workforce airplane of we commercial organization. we efficient, need the to execution We've need improving we do a company. priorities more setting to on the includes recently consumed before that foundation And a of to what to somewhat restoring Boeing. and right to the an create reset This leaner, for streamlining have do will on of focus reduction, activity. nonessential the announced we we're reducing path do to next to lot

that lot to do. So of over before I Brian, let we a have to work hand summarize by it me saying

capacity opportunity, a This Getting helped changes travel define and big a company ushered on a to to is the does, the moon. values take already is it help the but to man it era have will will excited has to and We plan about you. with look that I be turn, again. all future. air great define new that of that when the shift legacy our is this some plan in what working This of back I'm time forward and the underway. the first

it with to we off and coming answering to and look back your me hand Brian then cover forward questions. that, the financials, to let So Brian?

Thanks, Kelly, everyone. and good morning,

work performance The the primarily reflecting quarter. was Let's the previously primarily total Revenue widebody financial the company commercial advanced quarter timing, per was Improvement stoppage unfavorable commercial for and cash in was IAM defense and commercial driven IAM use including payments. including billion, charges widebody down results billion certain $X work across share X%, start better-than-expected driven impacts of from and programs. deliveries, with $XX.XX, core loss with flow impacts BCA of capital was the prior versus working the associated announced by $XX.X by lower impacted impacts by work with the stoppage. lower a deliveries expectations Free stoppage.

Turning billion quarter and minus programs, the $XXX charges XXXX was period reflecting of work in to Airplanes. XX%, next the announced ended IAM primarily costs, on $X and page, was operating margin at in XXX stoppage quarter. cover XXX includes Backlog the airplanes airplanes. Commercial the than BCA billion delivered X,XXX the more R&D. billion, including Boeing and higher $X.X I'll and previously pre-tax Revenue

program delivered the the The in Now color XXX more I'll on give key programs. XX quarter. airplanes

preparing and objectives making XX the mid-September, had for work month those we but stoppage. now by in stabilizing IAM production per longer on will good As noted take year-end, due to been progress

cash, to supplier and need our the Given strike to adjustments shipments. near-term broadly made stop we've conserve

for ended to manage objective last XX China We the XXXX, catch to vast supply quarter the majority supplier We position will our built for with post in certain ramp customers support maintain allow continue from and down supplier this quarter. XX based to and chain inventory approximately India, on strike. The to XXX-Xs suppliers, levels by them to our prior up.

which factory down impacted by year. shutting work will next extend on progress now Additional into the the stoppage, has Shadow been

levels On unchanged. stable the remained and inventory -XX, at the certification airplanes approximately and lines remain -X time XX

quarter per airplanes per quarter. X inventory we through in We ended continue exchangers delays built associated to currently at still that to delivered down and and required X seat plans month previously in last noted, The And heat producing On we X with delivery from production plans return by month recovery the XX certifications. program to XXXX rework, work the airplanes quarter. XX with on as is the prior XXX program, to year-end.

also Our stoppage impacted factory will and work finish shut by and next year. into extend the ability the now down been to Shadow the rework has

the on program. XXXX Finally,

certification the well certification delivery We'll the IAM continue the in first which the the charge announced, XXX-X progress with flight commence. prior averaged delays to as of the production lines of build inventory primarily per address and to time Year-to-date, has expect the testing development anticipated first delivery, previously stoppage. latest our FAA year as bit work As to typically of lead profile by assessment The we follow the ramp, in $X.X below through deliveries largest look now process similar a associated reflects as million billion to as the pretax delays with will will $XXX quarter. inventory associated with spend programs XXXX. XXXX driven unwind cash cash of use prior the the

& from page, BDS Defense $X.X the during $X billion prototype Grey quarter, billion. award billion, MH-XXXA quarter, a U.S. Moving Wolf, billion E-XA and XX Boeing Air at rapid on aircraft Force to and Force. Air ended the the the orders year-over-year, the BDS Revenue for U.S. the in including backlog X in including next definitizing $XX stable aircraft booked to was first the $X.X delivered production Space. Wedgetail

fighter minus programs. announced, commercial of we the third in indicated due charges MQ-XX pretax previously be X First, things: that crew and would operating September, on XX% quarter, KC-XXA, was satellite T-XA, XX.X%. In of comprised portfolio, again of primarily $X and margin on programs the billion BDS As the negative to recognized margins the and

down as Our recognized F-XXEX production. to pressures quarter losses disruption in as as and fighter a due ramps shared third F-XX production up winding on the well programs line cost additional

freighter. the on higher contracts reflecting and development price of on production XXX of expanded to stoppage in magnitude Second, these production on and cost fixed costs work T-XA the programs. decision KC-XXA on program close XXXX losses and with program, mainly the impacts the we an the books, pressures as estimated the on beyond primarily associated updated IAM conclude additional assessment The

Given for the impacts be work these we'll stabilize to about transparent fixed programs. we mature to as contracts, continue and nature these price

complicated to capabilities the are retiring medium margins While focused unchanged. acknowledging we remains these quarter and risk are these improve results, remain each disappointing and term long development to customers. The delivering ultimately in plan these programs, our to on BDS mission-critical

revenue very experiencing our including due of single-digit the threat Puget production, remains the standards. compression XX% and margin the in expect new about execute business allies. supported representing in our we stabilize nation derivatives to the tighter by the mid- to Sound to generally our our solid, to and margin remains the performing historical business core defense stoppage. Broadly, still contracts to Our We return with on as disruption XQ transition with the demand high products range strong, in work for commercial environment factories, programs development confronting performance underwriting and levels

to key year Moving with primarily a on the Air business well was secured XX%, margin up mid-teen and orders to Force. received BGS last with high higher franchise next growth, ended billion. Services. focused on long-term favorable terrific XX flow spares conversion. the BGS a service at several in as offerings capital-efficient and up quarter, volume. quarter. X%, perform contract page, KC-XXX Global agreements mid-single-digit and services from $X.X backlog billion, as margins It's cash to on the basis the revenue profitable, compared mix. In Revenue continues executing The very volume and ANA Operating the well U.S. in $XX $X commercial was Boeing billion on points well

of Turning marketable reflecting primarily next use and I'll quarter. ending the cash now undrawn. $XX we free a cover which $X Last $XX debt. billion, and the of to cash page, balance in debt all The into billion entered facilities billion at at access we quarter remain to stable, the remained billion. ended the totaling $XX.X flow credit week, On facility billion, credit cash short-term $XX.X and securities, have new

of and be the production of We in sheet. flow to cash of pace expect our the the return XQ unwind by driven free a usage balance work, ramp inventory timing to the

improvement to XXXX significant another cash, expect over be anticipate of this use year. a we While we

in to next the to we expect as rates. with we business exit momentum year production Importantly, real normal return

future. We to shared We reality financial discretionary across to continue focused cash significantly preserve decisively to trade-offs. implementing our align our and partners while spending We've our We're safeguard with the our take the of supply and the across workforce our balancing set company. a tough but to necessary chain expenditures priorities. reductions actions reduce associated plans to more worked reduce to

to Long the offering a delivering the resume questions. structure with workforce and come. Stepping safety, sheet Matt, we we confidence equity-linked that securities. near our constantly our investment an We're significant, managing our $X.X and directly allow Sound as rating; XX result manner of with objectives: stoppage. investment-grade in work As the recently satisfy shelf these term, in evaluating years fundamentals our while we with we will and that, underpin the long-term comprehensively priorities, steadfast ramp product capital keeping agreement will taken, fully for our let's the delivery aligned establishing through have our term, focused business liquidity registration, term to positioned, is sheet business take that over including remain the confident to reaching levels could committed the process, time, the for include in levels built equity which could a our move on maturities our plan universal next view We're actions maintain than debt our structure and an factories address over balance performance to return open to the prioritize in rating on then area grade. The months by supply Puget confidence fashion to we of profile. Near representative effective, balance this and customers. We ensure now focus customers. With production our the we've credit a is second, and in main a support capital as stable for First, we'll we're safety, as of on an credit more that factory serve demonstrated quality manage allowing with a prudent and chain to markets backlog these well back, quality the up which our portfolio and for investment-grade X and are to the reset, trillion. and longer

[Operator Instructions] of from Walton Wolfe first Your from Research. comes the line Myles question

Kelly. talked about speak company. Nice again, an to airplane In as you with remarks, Boeing you your

And how of noncore I as and so want specifically, your core Commercial describing what and it significant you're turnaround is portfolio you the outside understand simplifying Airplanes to just and Boeing see forward? shaping in is business looking

Yes.

as not well. of this it better I you and first the less portfolio, I it So look made than doing to and I've again, and good all, Myles. -- Look, off that think we're doing comment, doing more talking being better doing at

our So evaluation those the something what from at CEO us? So systems or come that. be and the add there's portfolio. of to run. a the this into airplanes the here. are efficient the X an for But there taking with or we Company these core to distract of on fringe do you company Boeing that does defense looking we It's new years XX and when the goal that stay in more like main going I'm us process And Clearly, the asking to we're always business of long some commercial now? things from probably in process in filter our want distract of and can value with of do through the things company a things going look and

for that. come don't specific on to the ahead list a us to hand today, get Myles, don't specific to not process keep, to is I'd a me have on things have my something of to and don't going I underway everybody we're in but start and more keep. and So of that, we're ask that evaluate list That's I going this,

the comes David from Strauss from question of next Barclays. line Your

there. about you the and balance plan to wanted sheet ask So the

the in as and agencies the a capital a over to potential your as thinking parameters longer ability is your I'm So sure function the raise? around well of how the terms term. with timing you're of this size discussions of cash generate rating

maybe the company thoughts, out in maybe initial target to So what $XX as rating credit some thoughts flow that that's the your the from generate from future there? hearing relative the cash ability on agencies -- well as billion free to been you're the around color of

take I'll David. that. Thanks, shot a at

plan rating inform necessary balance active We that be and we a events And raise in in plan and done they monitoring to have. the a to a agencies, perspective, constructive determine sheet. From a with we'll right timing and address engagement to we've the the we whenever the and are dialogue, the position it's do closely we have everything it's time. capital, help we're markets access

by of terms as on what's near-term both the fourth In of mostly in And is in ramp the next the historically years. to that maintaining piece important and in question, we're size. flows on the have as driven we couple focused be revolver we size our of next us here's addition maturities billion We're debt capacity anticipating we have. usage production. cash timing, third to quarter our And to this year of cash $XX

All sufficient as is raise a address to of and recovery we contextual plan. liquidity ensure our how we execute for needs capital would funding think about game that the

priority focused. on We're grade. it's plan. a our investment the have to we protect And So all again,

years realistic about think Kelly, that's the on so time out question And next around what maybe based you've if a take $XX this for company that target target you the Is any Okay. there. to billion several far? seen could that over

outlook we to for to put under the the in Yes, target that. are stability some to that. just need kind say I of time some me there. would to certainly, answer able any see early need the And be business it's And I financial review. long-term assess out all forecast, too to

So provide But I'm not to I'm ready evaluating any to today update that. that.

the Your line from next Jefferies. from Sheila question Kahyaoglu comes of

as nice speaking Kelly, with always. Brian, again. you thanks And

of So Obviously, are flow positive and positive XXXX today. in that total. the were some is assumes in free year usage that the vote what Brian, in as we QX? more cash you talk mentioned in cash QX 'XX? QX for free flow BCA Can about does drivers you How a ranges next anytime positive assuming it in And delivery And about the outflow BDS in your outflow? you become do think losses?

Sheila. Thanks,

half. we third to as with drag So the the benefit earlier had working from that drag expected -- quarter, timing in line about working customer the cut a And be a the had first capital working capital in BCA we capital quarters. X advances in we expected closed quarter, half about

as ramp. quarters building the we we're work of is drag quarter, fourth upon a the a the to essentially to had going But of first as deliveries the So you capital into fourth to inventory. and right depend could pace timing quarter the a the to the see X we've production as return lot look shift similar working

as So the lot similar net-net, through the on look the free things end quarter for year. fourth quarter move the second could of cash depending a we together the to of flow of coming course

to pertains will we As the be the real production to then and usage and turn build and half positive second more free to XXXX cash we momentum stable return to cash half XXXX, flow And rates. year as XXXX. be a exit better it first significantly the expect than

we beyond. recovery and is is ourselves So 'XX and profile the but to for up set usage, the for calendar then be year important likely the as

some be we've on In be year. charges is ramps, production early too stand doubt by the to those terms of is then the end we've that driven going of BCA get more divisions, to of as of the good will there's be implications handle rate we cash the those call And impacted descriptive as towards of today. that some got but we the BDS by we'll announced, which a in that no and

line comes from question Harned Doug from Bernstein. next of Your the

you're that lost large of headcount to you a factory senior ago. who X long to was also management And I was reduction. Boeing's the part look And from benchmark once referred the idea you've a initiating were a culture. over if that the mean culture. time for years, Boeing floor, experienced Kelly, many that last leaders

for about this and leadership goals change, And rebuilding internal how involve make this achievable? of environment you talent to thinking stabilization your should approaches? in external So cultural execution the are business and

Doug. Yes,

the still in is people. got process So right My focused people we've the position, great do down. around, of and X the X we've our the Fantastic in I first people, all, of got Boeing the first just in traveling impression particularly meeting running I'm everybody place, right things. on got Company. We to right to there. work get And think some levels

the folks I'll probably we course, needed. a change. that at little on. looking of Boeing, we need some see right, as we're the referring culture bit think If additional culture do at But moved Of some supplement think outside in team that I'm have resources helps from us to I outside. retired most also who culture or when lived view the you're

company. and and here as got switch the the never-ending continue This company. And at top. that culture It's something this. holds strong, about it there's cultural meeting people know prepared in really organization light culture change values we're I've to aspects to where very starts I've culture. starts flips. our top where We at a the process. to it's the you like. self-developing that that looks a back know been had very, I we've point to is reevaluate I said be top. But that to change and come do itself the as the that the explicitly and a the We've get in in it accountable in. time, got leaders the the and is what to take going new and isn't with a what entire talked my a just work the we bring remarks. I company of to going company, becomes We'll So values to the for going the to values have. This self-policing

So I do. something that we can this is think

large I in got in We've here. some supplement culture turn employee the have areas we around every base. with a certain resources. additional we main, may the But think to need with employee to outside

I've much to XXX on commented, come reduction. let employees me down Now slows or just It Look, the get lot the of workforce them being And heard a their too as work announcement the in we're the there's of from things one done. is inefficient. I've able to overhead.

It's going production labs. in consolidating really we're or going we're the activities, it focus out not I of That's take our think wouldn't streamlining of overhead people to engineering this consolidated. And workforce that to those reduction things here. ourselves efficient going a to machine And getting over more as really and more that's as and intent the can next around the the Brian I think So be about off ramp going production, lean year. have like important about, talked mean up forward. we be

next comes of from the Ron from Your Bank line Epstein of question America.

you we've And it feather in new we And do addresses about you When to back of this you should Nice where that to the airplane? Boeing you some and hit. where the could this expect of you talk X outsiders really, I about a already mean to as looking you again. in, think be? think kind want you think what Where that? be? questions could company sit will company be in years, do how

I'm I look to want going understanding -- want like. defense doing that detail, in it's market. through engineering doing I we the capability aerospace to I be But I'm want actually we've get before, of, doing still process do to a us still we where look, our for for setting got deliver. the to not our the is And marketing. and our production customers to the point said that capability the clear, and our Well, our I talk. products want be leader us, marketing as in what standard

be things have going right is not pursue. focus to They're on to are extremely to where critical. I the front what we situation need of going us. execution be a we So opportunities is figure to think at. go out we good This do market that can in we

is backlog strong. so Our

our out Our demand what so focused is things. And that? comes on products we for product do limit the You well us. numbers. can that for This the strong. ourselves is efficient sky executing is deliver And our about we those of I lines. run as the for the getting and those the market, can is things we're if on mean demand fantastic into the

from comes Your line the of next from JPMorgan. Seifman Seth question

Good defense talk you, Kelly. if a with Kelly, business. to clarification. and speak Maybe you I a about do bit I the if a could could wonder little question

I recent but estimating are us There's the fact contract suggest an tough by surprised charges lot the the magnitude there been the think of a terms, in that that some persistent of there well. charges there's so obviously have as years. problem

you at of rates? do maybe, Brian, kind to production or end BDS? next normal the there? And getting production core of rates acceptable those the by -- And are an normal to about And then the what year. to an What you talked of acceptable so take get does as by -- level the see production the it what rate problem

Okay.

start Let me with BDS the portfolio.

got contracts, So We've to contracts. everything through there's magic work bullet to have no tough tough to true. that. of some and those you said way going We're is our some

get the contracts needs we control Having to those discipline said on better. what about that, can

to better. EAC needs Our process get

on thing these Our not we're but so that I them. is -- risks, risk the management we're think admiring acting this that is important is

things with think enough work these out to So EAC programs. turns an we've how don't been overrun. figure been we've risks our And it derisk customers these carrying to in I doing before into

enough to to out, gone because you around to programs. around a dealing lot So problem focused today's on doing, on the lot the that's we're deep not looking looking as look the more deeper pointed programs, today's more team we've the corner, lot problem, from be going I've today's with a because is dives, not and at that's today's problem what what these a quarter problem got just

of some that going programs at success to define on customer forward. that better And working to got with means these your be you've

we're bid around really to be are So as look, things also, make our and I on understand we risks to you, enter proposal discipline contracts well. that on absolutely will that tell into to troubled that it's new some lot focusing the contracts. sure taking But wave We're we as putting going wand activity, that up clean not take these problematic. up of signed work. to and a we're a We going to able just

there. And I on So what's future, a factory the labs, the burn think have little being us bit I execution down We better how these run ones, the in to floor, just of the people I'll programs. think are know and don't lost tough get people We opportunities are close identifying successful. discipline. you, our to from tell the the keeping enough on

And that and regard, to so get these there's got just focus EACs. to We to some come better. in we've -- on we've started changes made more

per happened. were your to the stoppage then stoppage, in the the we XXX. question, very prior to in month starting to had Renton line on place a up were to get work progress. Seth, nice And XX to We work that BCA and We making plan bring third

through we'll get track. is, and our back So look once year. discussions year, about per as work, that in And through month. move not those timing, the that is expectation increasing ramp go we production the we'll next forward getting beyond get kind we back next specific to to be regulator having of XX on we we then All milestones with through but are

line Arment from from of Baird. Your question Peter next comes the

your kind evaluating of on it plate pull know vertically point? still and you the again, has house, And -- the you've to deal about to with you're but to Can Boeing thinking are maybe now address familiar in as little how Boeing a a you in you inside. things, you're you've I Kelly, being a of lots and and about Spirit capabilities? outside portfolio got decades and could Kelly. kind you things of spent that from lot got bit few integrated talk talk very and Nice -- in that and acquire supplier -- what a a a

Yes.

be part all, acquisition of chain. our change Spirit to in just terms the they're a the of in the as supply to that's here And the commitment one no there's of and business of clear, stabilizing our major activities First integration. clearly big

Now sometime the deal until year. won't next close

system root in pretty overall to so originating So in support I we that the fix And back we defects strike, the I to it's very our ramp-up. Spirit, back starting prior pushing some important the and they their coming quality getting to good cause the of that see with And they're good making improvement We're into then see in. were performance and fuselages where we improving Peter. progress the are to there, like what work closely in those. that

our in no Spirit. with change So strategy

every Spirit. us there. we through them And day, from a our be their challenges. We've that's their once improvement where tightly easier to on think will of several today. got improvements couple going people are be we've do it got I for But the to under and work that belt, be helping critical some we site our with think that step get hundred integrate will lot ramp-up. to And I change even of to a work

Your Goldman next the comes of question from Sachs. Poponak from Noah line

cash expect you year Just XXX% flow are clear, full to for guys free you XXXX? saying negative be

Yes.

So X you little bit into that have could on more Because a MAX flow I footing I year. to could thought is about Brian, would of if exiting momentum of you talk recovery it you a 'XX maybe place. positive production the have X, the little bit rate pretty sounds can that? decent exiting get like a 'XX, pieces guess cash certainly

You still don't to being stand I guess, have with unwind. know where advances moving ramp what of for post to a I appreciating. you roll ton about And And -- schedule. more relative I guess is than defense? labor just a tougher back maybe you're the that. to behind up assuming MAX I you know don't the lot maybe takes could up those pieces that talk I'm dispute But inventory

Sure.

today, be might look in the laid of business, out ramp. is it we we but it have of sit our we first all one significantly we're work exactly pieces we as return investment to expectation be commercial like. we side an the get are that don't things a making So some We further We first have general our terms forecast going will addition in the to cash have didn't the better XX, on And in clarity the know have work. thing XXXX, is XXXX as as which you to beyond versus speaking, flow, of XXXX. to the didn't to have that a EIS of factory. ramp all, that a And back moving at that on gets broadly to pressure do cash which in need for ready most put to is here going what flows. But

to into get typically which year have but clearly, recover. then in we'll half and more specific So more of production described, with as going half, is second to in heal we the a usage that first I going and and move quarter turn that as end cash the it's we're the the profile is next that appreciate first that to exit we then all momentum and year be going the through factories

been we've BDS, terms of that charges In have got announced.

Some and we to of and with game focused be going look we we team performance different operating execute plan that to year. of much are near-term exit forward charges to more those a and level as have acknowledge a to next

So levers as early all all we'll going the It's are moment, how towards keep year. call and on move this it's these part mix. in we to the to posted at of the hard get you

of MAX looking of first once back a the resolution? your what's best that labor have September number takes it of guess what to was you half I to get like months guess

is Kelly. this Noah, Yes.

me exact month I not be. to don't because exact month what going the know -- I'm is an give Let going to you

our the Let to we've have me we take got tell that you kind plan. in of some steps that of

be first So the it members to of bring couple probably weeks all, a of back. will

recertification that effort and going effort to We retraining do. a we're a have

on who than we so that going the those job on important do we're more -- coming go through haven't who an airplane didn't their to out strike, out went of a before fast trained activity. It retraining get been right and on enough were For chute. time they much is this

we've off in chain got As that cases. many we've turned the now right you know, supply

So going and as little to supply But the bumpy who start I'm are a fuselage, forward. them for stop and manage example, that tried folks like from chain. some back to keep going probably could to funded We've folks keep and to are up. we return anticipating on had there we're have Spirit, best moving

And on. chain back about issues some associated so bringing we've got supply realistic to the be schedule with

is care if increase. going to the And in going we've I that the think a with that. But a is rate be right laid achieving production thing we're FAA. plan time first we for we other place. month We're the really first safety rate cap that metrics flat direction us to sure and metrics increases. that with to system. important a you has and the We've trending lot a achieve those to quality actually thresholds of to FAA, those management And have won't have within it to increase. we that make and is the FAA this the our This key that done take FAA not the done of monitors they meeting and The got certain take have be be in know We've I'm it. XX anticipating it rate

rate beyond And hardest so XX. be first going going to one's the I probably think the

And around aerospace, our There's first both of time the it, in technical rate so this lot you will And anything that hard. how be and the time. dynamics we it's around just forecasting political of can't be a the increases increases. first overly aggressive the do because in rate we're parts dynamics

So with that rate make we're have we when And we're that. sure FAA not the ready. lockstep on I'm to absolutely increasing not direct

things are I those for think is us something to all watch. So first the -- increase rate

the I the recovered call in increases think more, Brian they'll exit as a that throughout much for I'll rate or easier we get sequential next normal year. fashion. And said, after should it, year

Deuschle question Scott comes Bank. from the Deutsche of next line from Your

work ramp a I the over? getting supply and specific how more work managing And through strike frankly, detail steps ensure Can and that just position remains years stoppage? supply following challenge also is later. taking what was chain a clearly up there Kelly, to you're up supply on to on this broad-based And was on back the you're a of in once provide chain. you because last ghost stoppage seeing still that ask things we're X time, track chain

how the of past. kind more mistakes And so on just some of clarity looking here avoid for we

with every on commodity to is. work have situation we to current supplier what answer the is each relative their that to Yes,

because much with associated we there there them or Now I was some I've think turning was behind hot, a for kept -- felt cases, as people that down. too risk in they need we've were either said,

larger themselves. a healthier they're position the actually get companies, use time of this Some going to in to

will that I be It have the things okay. So we ones that twosies or think will be deal with. to

You to airplane. need the the all parts build

we've decommissioned not a like bring not as of So long a issue. their such factory balance a It's for been a someone's major strike shifted on, that that or period out we workforce. a foundry I'm on or expecting changed

they temporary. ourselves. furlough them call seen we've And have done back. We furloughs folks be to they That's why furloughs because able those furloughs to want some are but some

in, supply So managing that on. we're as supplier out, all our by this supplier, day chain keep of communication day to we bring back with trying close

of next comes Jason line from the Your from Gursky Citi. question

And welcome quarterly of to fun the back Yes. earnings Kelly, calls.

Thanks, Jason.

to balance and talk seems Let's you're like as about sheet. to plan. see here a here, particularly it pretty I little a to here thought bigger bit deploy want the just getting turnaround out picture well the to me It relates ready

that you're cost cutting doing got here. You've some

divestitures at there about be about some there. look raise you've capital portfolio, Brian's talked talked might the better the and potentially about you're talked execution. You've going to

programs you term. cash what to path this to pace at I out sense of of from opportunity one whether on how out turnaround. wanted And disposal get say a options contracts ways it's to is time, I the how profitability programs flow of going increase of kind want that know menu just some got that you get longer think thing potential I get some to that over be you've or missing free list, to the of for or may on some just from these all on no exiting the some to an the of absolutely or And these that some of I contracts is just of tools try a there's think we're but really the because sense here? you for have kind of you long a can of are just go doing take good that and on kind looking of about the whether your get all of that. you you

Yes.

us. don't I -- we a need wanted capability. to, option if that's them. defense think I these the even from think walk if EAC this you're we away These think can contracts. big look, programs we've are talking where got that to I core just problems, don't viable we So I We've can our to think long-term got customers don't commitments

areas that answer too. of and where to and away this. In And with in help my work with the comment we prepared enough to us the isn't see if them we help walking and there's customers with an been and them remarks things So an to have earlier, can doing I off don't space trade do customers. we've trade the think

up come unmitigated can some we forward. we these are So with and going risks win-wins sit don't that here with

I the think would these I -- things. more where So focus on that's

doing. to those I'm we are do in that where there away get that Now have phase doing a And and more that about. is programs. think and going working streamlined evaluate. we we're we to at balanced be position one that we've currently portfolio go the in where want to contract the to get we've There got much cards. we don't on just do it less sit walk areas that. we're will the a got phase And contract But some are to -- with and programs be may stop profitable are talking table can next I a And effort more risky things wholesale the again, in just some

Cai next from line von Securities. Your Rumohr comes TD of the from question

Kelly. back, Welcome

questions So for you. X

the head build highly you could valued, really consider there you to folks Services at would they because secondly, not successfully. like obviously, portfolio, if we Global that commercial job on planes directly look side outside getting to hiring are have not several done? And have the could your argue in the you the fill First, very BDS properties looked slot the be from been Jeppesen, specifically required

you'd that raise would consider you any would significantly those the So of via to reduce equity? because have divesting amount

Yes.

of changes not these we head. to Do the if a outside So we'll generically, that's direction. If positions would we'll we any way I'll make, but And say, look take and to then the going say we'll some position, as we'll just I'm any head I internally. from have BDS Cai, at in, at I supplement specifically address candidate? the look and skills so, need right that outside bring the

as that averse I the to team. So averse teams said some in not bringing before, help the And certainly as think resources additional well. don't I'm to are I to

So that heads specific on we'll see positions. where

Jeppesen... of question The -- his second part

you've of to a equity don't divesting the planes like that things Services they're price successfully. totally arguably high that very Would Jeppesen got raise? look on Yes, to supplement in command an like required build you properties those any could and consider Global

in we're somewhere the at the on Or think I of need either off doing we deciding our else, we're strategy? about our I'm like portfolio specifically comment I'm what holding do asking our future. Yes, activities all get in talking by the company. there that and value business when fit better really and it value that's in destroying -- could we Jeppesen. businesses, more long-term what looking going at or core would the not does be property that, what Boeing talking our looking But in looking about it's for to I'm at and whether question, services that

guess is we'll we to I tell don't my list review. be have that to do those am just as to right we take on. that that going do? portfolio the want there'll what things And look things I action you now are So at some this

months? decision? time X are months? that have Are make you Do to we talking we frame Like any talking X

the that. want a the our have I what facilitate We've to want to planning, I of that. by Yes, a which got end long-range will feeling where do underway internally as we good process year

can Cai, quickly. some be Now these actioned that of things

things Some not these actionable. of are

things of take Some these a time. long

It's it can stop the incoming what freighter. of separated? said, the doing just we XXX there's work? soon. things look, coming the example, are, be and just Can that on opportunities at sort on "Hey, depends So We An XXX freighter. an looked

the and the of get decision way. continue out to of a We'll distraction the mill deliveries, been fantastic support our finish the support and that." customers that airplane and make now we'll Let's variants

But to type really going make stuff let's minds on declutter some the a going our what's with forward. want this I our of resources stuff difference of focused really us And that's for to and focus on. get

have And for Greg, time one question. final we

Okay. from That Research Safran the line comes Seaport question Partners. of from Richard

with be Kelly, speaking to you again. great

also about may So your of but you this about We've thought think and I ask outlook might Services, quarter. and how some margins you some the seen near- this growth visibility. better for I segment, long-term sales see Global year. modest basis I'd I about margin thought had you have talk We XX points trending? improvement

is going Kelly, the from things structure? way to you're Services read-through there any Or part with pretty core Global your are And there? happy

thing continue they the do my just them doing need now. focus said to me right to say corporation the to from want absolutely, support our team through not global the right let and there's Well, that's that particularly Raymond flow executing. is service, They're all X-part his Chris this aspects cultural this. that, in execute. Having help get well. they really are And strategy now just one sure make the of parts that I

through could for get areas company-wide a areas our Global our we but could Services, well. And closer customers. there's areas and our do and So outcomes better. There's people business well, Global have has it to better doing to that's permeate there's Services as activity, they're in we

team just priority them delivering continue want doing delivering. really it's and Chris' that to and So they're my but right down in is We results the well, not I this head say together, would now. with their they're

today. concludes for our everybody, that call Thank you, And joining.

Thank Third gentlemen, Call. for that the Quarter Company's Earnings and Ladies XXXX completes joining. Boeing Conference you

disconnect. may You now