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Boeing burnt through almost $4bn of cash in the first quarter, reflecting slower 737 Max production and compensation to customers as the US plane maker grappled with the aftermath of the mid-air accident in January.
The $3.9bn of free cash outflow is slightly lower than the $4bn-4.5bn the company had warned in March, but compares with an outflow of $786mn for the same period last year. Boeing reported a $355mn net loss in the first quarter.
The company’s financial results “reflect the immediate actions we’ve taken to slow down 737 production to drive improvements in quality,” said chief executive Dave Calhoun.
“We are leaving no stone unturned and are making significant progress,” Calhoun said in a memo to employees, noting Boeing is making improvements in training, tooling, inspection procedures and controlling the flow of travelled work through its 737 factory in Renton, Washington.
“We are using this period, as difficult as it is, to deliberately slow the system, stabilise the supply chain, fortify our factory operations and position Boeing to deliver with the predictability and quality our customers demand,” he added.
The plane maker is building fewer than 38 Maxes per month, reducing deliveries that are necessary to bring in cash in order to improve the quality of its manufacturing following the mid-air blowout of a door panel on an Alaska Airlines flight.
Boeing faces investigations by aviation regulators and the US Justice Department. Though no one was killed, the explosive loss of cabin pressure injured some on board and recalled the two fatal crashes that led to the worldwide grounding of the Max for nearly two years.
A preliminary report by the National Transportation Safety Board found that four bolts meant to fasten the panel to the fuselage were missing.
A US Federal Aviation Administration audit of Boeing found “multiple instances” where it allegedly failed to meet manufacturing and quality control requirements. Regulators have given the company until the end of May to submit a plan to improve.
The company did not issue any financial guidance for the year on Wednesday. It initially declined to issue guidance in January, with Calhoun saying “now is not the time”.
The 737’s troubles have led to a shake-up in Boeing leadership. Calhoun said last month he would step down as Boeing chief executive at the end of the year, with the chair of the board Larry Kellner leaving after the annual meeting in May. Stan Deal, head of Boeing’s commercial plane division, departed immediately.
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