Leeham News and Analysis
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Leeham News and Analysis
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Boeing reports mixed results of latest employee survey, but middle management and officers remain key obstacles
By Scott Hamilton
Boeing CEO Kelly Ortberg is working to improve the company’s culture. Credit: Boeing.
April 22, 2025, © Leeham News: Boeing released an employee survey last week about safety, culture, and related items. Some areas recorded improvements, while others recorded declines.
But the survey data released did not address a serious problem Boeing has had for more than two decades and continues to have, despite efforts to improve safety, quality and culture: the “deep state” that exists within Boeing at the middle- and lower-officer levels that continue to practice intimidation and retaliation against some who attempt to point out problems in the areas listed above.
In interviews for LNA and my forthcoming book, The Rise and Fall of Boeing and the Way Back, it was clear that Boeing CEO Kelly Ortberg’s initial rounds of housecleaning at the executive and some lower levels haven’t scratched the surface of the root of the company’s problems that have brought this icon to its proverbial knees.
Rise and Fall is essentially a sequel to my first book, Air Wars, The Global Combat Between Airbus and Boeing, published in September 2021. Rise and Fall is in final copy editing, with a target publishing date in September, the fourth anniversary of Air Wars’ publication.
Boeing’s release of its recent survey last week presents a contrast in contradictions.
Survey results
Boeing detailed the following. The results indicate Boeing has a lot of work to do with its employees.
- More than 82% of employees participated, the highest response of any Boeing employee survey since 2016.
- 67% feel proud to work at Boeing, compared to 91% in 2013.
- 27% would highly recommend Boeing as place to work – and at the same time employees remain committed to turning the company around: More than 92% of employees said they plan to stay for more than a year.
- 54% of employees felt inspired by the previous Boeing values, and most believe the company should do a better job of living those values and holding each other accountable.
- 75% of employees believe their direct managers are effective, but only 61% of employees feel their contributions are valued and recognized.
- 42% have confidence in their senior leader’s ability to make decisions, communicate direction and respond to concerns raised by employees.
“Our Culture Working Group helped shape these new values and behaviors,” Boeing said in an email.
- The group includes 40 employees from US and international teams, business units (Boeing Commercial Airplanes; Boeing Defense, Space & Security; and Boeing Global Services), and in a range of functions, roles and key demographics. 25% (10 people) in this group are based in the [Seattle] region. They include employees and managers on teams for production, engineering and other work at Boeing sites in Renton and Everett (including final assembly) and also in Seattle, Tukwila and Auburn.
- Half of the group are individual contributors and half are non-executive managers.
- The Culture Working Group gave valuable feedback; for example, they felt that including the behavior to “give a damn!” was important and encouraged Ortberg to include it.
Ortberg’s message
In a message to employees released concurrently with the survey results, CEO Ortberg wrote, “Changing our culture starts with each of us. It’s the most important work we can do to restore trust and turn our company around – and no one is more committed to this than our own team.
“One of the most important steps we are taking is defining a new set of values and behaviors that will guide us. We started by asking every employee to share vital feedback through our first employee survey in nearly six years. Our leaders listened and we formed a working group made up of your peers from across the company.
“With help from our Culture Working Group, we quickly got to work and used your ideas to shape what our new values and behaviors would be.”
“Culture change will take time and it’s only possible if every one of us lives these values and embraces these behaviors,” Ortberg continued. “We can start today with leadership listening to their teams, understanding their challenges and making it easier for people to do their jobs. We need everyone from our factory floors to our engineering labs to continue sharing ideas and speaking up. I’ve asked my leaders and your managers to do the same, and together, we will hold each other accountable.
“This is a fundamental shift to get us back to an iconic culture that once defined Boeing as an aerospace leader. Now let’s work together to live our values and behaviors, uphold them, and return Boeing to the company that we all know we can be,” Ortberg said.
Credit: Boeing.
Our interviews
As I interviewed people for LNA and Rise and Fall, a picture emerged that despite efforts by former CEOs Dennis Muilenburg and David Calhoun to improve safety, quality control and the culture, roadblocks continue. Boeing repeatedly touted improvements in its Speak Up program, a process designed to encourage employees to report problems and make suggestions without fear of retribution or intimidation. But such still exists. Airbus has a similar program that appears to have stricter protocols for protecting the reporting employees.
Furthermore, Boeing’s efforts to report improvements are devoid of detail. Two days before the one year anniversary of the Alaska accident, Boeing issued a press release touting all it had achieved in improving safety since that scary day. Simultaneously, it continued to stonewall the engineers union, SPEEA, in a safety initiative that was by now almost a year old. Among the items Boeing listed were:
- Addressed over 70% of action items in commercial airplanes production based on employee feedback during Quality Stand Down sessions.
- Instituted new random quality audits of documented removals in high frequency areas to ensure compliance to process.
- Added hundreds of hours of new curriculum to training programs, including quality proficiency, Safety Management System (SMS) Positive Safety Culture, and critical skills.
- Mapped and prepared thousands of governance documents and work instructions for revision.
- Significantly reduced defects in 737 fuselage assembly at Spirit AeroSystems by increasing inspection points at build locations and implementing customer quality approval process.
However, the company didn’t detail data to support the claims. For example, in “addressing 70% of action items,” there was no definition of what this meant. How many items had actions that implemented the suggestions? How many were rejected? Were some merely “addressed” with a kind of form letter, as one employee interviewed last week told me? Boeing initially told reporters there would be a briefing, then canceled this event. It also declined to make anyone available to answer questions and corporate communications did not respond to specific questions I posed as the editor of Leeham News.
Intimidation and Resignation
The larger problem facing Ortberg and Boeing is changing the culture. Ortberg has made a few key executive changes and a few within BCA’s middle management ranks. Efforts under Muilenburg and Calhoun to improve the culture and encourage rank-and-file employees to speak up without fear of retaliation or retribution, appeared to be well short of success when the Alaska Airlines flight 1282 door plug blow out happened. Employees of the engineers and touch-labor unions made it clear that retribution was still feared. Formal complaints were filed alleging such.
A former Boeing employee whose assignment was safety education within the company. He quit earlier this year. He was frustrated that mid-level managers and executives rarely attended meetings for more than introductory remarks. Lower level employees often left before the classes were completed, citing work requirements. The employee brought his concerns to his managers, who dismissed them. The employee filed a Speak Up report and received a form letter-type response.
He considered becoming a whistleblower with the Federal Aviation Administration, Washington Senator Maria Cantwell and Washington Congressman Adam Smith—two members of Congress who have been highly critical of Boeing despite being from the Commercial Airplanes division home state. But this employee remains afraid of retribution.
“I guarantee you that they’ll circle the wagons and try to discredit me as being a disgruntled employee. I am a disgruntled employee. I was furloughed and flattened. I was threatened with layoffs and laughed at. I was cussed out,” he said. “That was my experience in just the first few months. It wasn’t until the team got toxic that I said, I’ve had enough.”
SPEEA remains frustrated
Rich Plunkett, the director of strategic development for SPEEA, is the lead liaison between the union and Boeing. He’s expressed continuing frustration with Boeing over union safety initiatives. Among the complaints: Boeing’s labor relations department, not its safety department, is negotiating for the company. Months have gone by with no meetings. Company negotiators insisted that Boeing be the arbitrator over what safety complaints would be heard by a special committee proposed by SPEEA, which could include a member from the Federal Aviation Administration.
In contrast, Spirit AeroSystems, at the time Boeing’s leading outside supplier (it made the fuselage for the 737 and nose sections for the other Boeing commercial airliners), cooperatively and quickly adopted the same program and process SPEEA proposed to Boeing.
When Ortberg first joined Boeing, he quickly met with the leadership of IAM 751, the union that assembles the airliners in the Renton and Everett factories, and which represents employees are several other Boeing production sites. The company and this union were engaged in contract negotiations, as recounted in previous chapters. Ortberg had a “fire” to put out before the “house” burned down. So, a meeting with SPEEA leadership didn’t happen until February 7.
Plunkett said the meeting was friendly. “It was a nice enough social event,” he told me a few months later. “But nothing came of it. We brought forth a number of items, particularly around the layoffs.” Increasing use of contract labor was another topic SPEEA brought up in the Ortberg meeting. Union leaders also routinely request data from Boeing for negotiations, ideas, and related issues. “We can’t even get data from Boeing,” Plunkett complained. “They fight us on data.”
Contract employees
Plunkett said the 10% layoffs ordered by Ortberg upon his arrival to cut costs in some cases amount to shuffling between employees and contractors.
“Boeing now contracts with Monument Consulting LLC, who in turn goes to contract houses to get contingent labor for Boeing,” Plunkett said. “To indemnify the employer, H-1B visas, for example, Boeing can use these people till the cows come home. And Boeing will never be H-1B dependent because they’re not employing these people, even indirectly, because they’re going through Monument.”
SPEEA’s labor contract expires next fall, so Ortberg’s attention may be focused on more pressing issues. But Plunkett and the SPEEA leadership remains frustrated on the impasses with Boeing’s labor relations department over the ASAP/Speak Up program and other issues it believes merit quicker attention.
“We gave Kelly an opportunity, and we’re just not seeing it happen fast enough,” he said.
It all sounds reasonable on paper — once you weed out the meaningless word-salad quotes from Ortberg — but the reality is that BA has a gargantuan debt to pay back, it’s not generating the earnings required to start that process, and its line rates are just too low to offer any hope of meaningful earnings in the forseeable future. With all of that in the mix, one can understand where the “Just Ship It” policy came from — reckless as it may be.
BA is in an inescapable trap.
On that note:
We’re 3/4 of the way through April, but BA has only delivered 11 MAXs from the line.
Unless there’s a huge end-of-month spurt, that thus extrapolates to 15 frames for the month…well short of the 31 figure that’s been thrown around.
Interest payments are $200M per month — on top of operating costs. So, it’s not hard to see that April will be another loss-making month for BA.
In a dire situation with continuing monthly losses, vague reform of workplace ethos is going to take a back seat to “Just Ship It”.
Either you can’t count, or your unreliable sources of info are eskew as usual.
FYI
As of the 21st, they have delivered 16 737s so far. On track for around the 31
figure that’s been thrown around.
Boeing has enough issues, without you making things more dire.
I said “from the line”…so that excludes the frames from the parking lot. You do understand the difference, don’t you?
Further: even taking your total figure of 16, that would only extrapolate to 22-24 for the month — not 31…and certainly not 38. And those 31/38 figures are supposed to be “line only”.
Indulging in alternate realities won’t help BA out of its mess.
And nothing you denigrate them for will either.
Clearly your goal is to knock Boeing not fix it.
Another 3 more Max’s delivered today, for those keeping score at home, and we all know who is..
Factory fresh off the line I might add,not the parking lot.
At least save your
Barrage of Boeing insults to end of the month when actual delivery numbers are published.
TW offers some solstice, and a pleasant refresh with his unbiased retort.
@Abalone
You will get your true throughput number soon enough. When Boeing reports tomorrow, I would expect the parking lot 737s to be mostly cleared. The stated plan is that closing the shadow factory will clear up capacity to deliver new “clean” aircraft.
Beyond that, if you have never worked in production, just know that deliveries always tend to be rear-loaded against milestones like month-end and year-end. Expect resource re-allocation towards aircraft that are in rework or “mostly there.” Invariably that starves the next period for ready-to-deliver inventory at the beginning of the period.
I will say that if Boeing had solid quality established, this whiplash would not happen. I am sure Boeing would love a boring month of production.
You can make that 4 factory fresh Max’s delivered today, Ryanair being the latest.
It’s not like anyone’s counting or anything
Enjoy your
cuppa or whatever
else you have to
start your day.
Only 8 more days to go to see how close they come to those delivery numbers thrown around.
You think you can hold out that long??☺️
@ Casey
Of course the monthly deliveries could be back-loaded…that’s why I explicitly said “Unless there’s a huge end-of-month spurt…”
However, the broader point that I made above is that even 38 p/m from the line isn’t going to cover costs.
Great for BA that they’re clearing out the parking lot, but we know from West’s comments that BA makes little to no margin on those frames — so they don’t meaningfully contribute to EBIT.
Every month that goes by at these (or similar) line rates is another month of operational loss.
@Casey
Beware of word salad from BA, they only count those produced when the 737 MAX was grounded, not current production, as “inventory” cleared.
I subtract inventory cleared from delivery to assess current throughput number.
It became clear during the McNierney, Mullenberg and Calhoun eras that incentives had been aligned with the corporate goals and objectives as they saw them. Ortberg needs to do the same. Only incentives will change behavior not grandiose statements and surveys.
The big problem with incentives is that they incentivize faking, fudging, window-dressing and shortcut-taking in order to secure that enticing cash reward.
How did incentives work out for the BA sales team? Presumably, they received regular fat bonuses — but only now are we learning that they over-discounted in order to clinch deals.
“The middle- and lower-officer levels continue to practice intimidation “
I strongly suspect that this level of management is only responding to the way in which they are being measured and managed themselves.
There are countless instances where upper management has proclaimed one thing and set up incentives that encourage other behavior, while giving themselves plausible deniability.
Wells Fargo and the opening of accounts that the customer had not asked for is a recent example. The person who came up with this idea was praised for increasing new accounts much above her peers, and promoted to manage them all ! (When the press discovered this she was then dismissed as a rouge employee, while the people who should have known, or maybe did know, don’t appear to have suffered at all)
I don’t believe this is a problem with middle management.
Fair point. Incentives have to be aligned with objectively measurable metrics that are within the guardrails of acceptable behavior. They cannot be “gamed”.
Spot On. Hopefully that is changing, see below comment.
IMO the middle management is exactly the issue, and not necessarily because of how they are incentivized, although that is certainly a part of the problem, but because there is simply too many of them. Having too many middle managers causes the responsibility and accountability to become diluted – creating an environment that is particularly suitable to intimidating the lower ranks along the lines of short term thinking, cutting corners, and other illegal/fraudulent regulatory activity that we have seen coming out of Boeing in recent years. If someone is caught in the act and the upper ranks are made to sacrifice anyone, they suspend one of the middle managers (10 days) and/or move him/her to a less desirable position with the same pay. Everyone else remain in place and the thuggish show goes on. What they need is significantly fewer middle managers (Level 2/3 head count reduction by ~ 70%) and really keeping those positions accountable while paying them enough to make it worthwhile for the management talent that is qualified to actually do the leadership job, as oppose to pretending, which is what they do mostly at present. The above transformation requires the kind of resolute personalities in VP and higher positions that are generally not admitted to the lazy-B, and that’s the reason this structure will never change, short of a massive purge or a BK and court supervised restructuring. (Not a speculation, I’ve been very deep in this exact issue at BCA).
Selling the family silver to fund repairing the roof:
“Boeing To Sell $10.55bn Digital Aviation Assets”
“Boeing plans to sell portions of its digital aviation solutions business to software-focused investment firm Thoma Bravo for $10.55 billion, the aerospace giant announced Tuesday.”
“Boeing said it will retain “core digital capabilities” to enable fleet maintenance and repair services for customers.
“The transaction includes Jeppesen, an 81-year-old aviation navigation company that Boeing acquired in 2000.
“Boeing chief executive Kelly Ortberg has described targeted divestitures as a way to improve the company’s financial position after a series of losses.
““This transaction is an important component of our strategy to focus on core businesses, supplement the balance sheet and prioritise the investment grade credit rating,” Ortberg said.”
https://www.channelstv.com/2025/04/22/boeing-sells-10-55bn-digital-aviation-assets/
***
Just in time before tomorrow’s Q1 results:
“Yes, we had yet another operational loss…but we’re now generating cashflow by selling off organs”.
The issue with the statement about Mullenberg and Calhoun is incorrect.
They did not try at all. It was lip service only. Mullenberg was both in over his head and drank the purple cool aid. Calhoun knew exactly what he was doing (not doing) and did not care as long as he could string it along and get his lucre.
Ortberg is the first to start anything other than lip service to the issues. If I have an issue with the current group is you hear about cash flow to the shareholders and that is a huge concern. There is huge amounts that need not just fixed but then funded before you even think about that.
Sadly mid managers are there because they maneuver for the job, not because they like managing and solving problems.
I can also say that until the top decides to reform, the middle never will. It can’t. You can only maneuver to some degree in some situations. Production you are locked into a pretty rigid system. I could push the boundaries some and control how I did my job, but it never translated into a manager recognizing it was the right way and to use those standards and enforce them.
We had a lot of people that pencil whipped the job and did not even grease the bearings. Bad management.
But it also takes time to weed out the bad ones and it does not shift in a few months. It takes years to weed out the chaff. Its a long term project assuming it can succeed.
@TW
I have seen this bad play before. Middle management (at a lot of companies) is stuck with conflicting objectives. You may have two objectives (one for delivery performance and another for delivery quality). Both are valid, but one has the potential to be gamed. It is easy to measure delivery performance. Poor quality may never manifest, or may do so long after the people involved have moved on. How do you measure something that may never occur? That applies to financial engineering as well.
Struggling to understand a better solution, but I would start with an incentive scheme for individual contributors for reporting bad quality practices reportable to a third party actor that can offer whistle blowers a measure of anonymity. There has to be a healthy measure of arbitration involved, but at least the amount awarded for reporting is quantifiable and the reported issues are documented for posterity.
@Casey:
Yea I both lived it and saw it.
All the incentives pushed a manager to be a bad actor. Even if not a bad actor to start with, the lies uppers imposed on performance are a reality. You meet the quota (or cheat to make it look like you did) and you beat up on the employees to do the same.
Its an environment that the worst rise to managers.
As I told one manager when he whined, you need to make a living but you do not have to be a manager and you campaigned for it. Sadly those are the worst and they are not honest with the employees. A simple, I have to do or say this but I don’t believe it. And they get bad results anyway.
As long as the system is corrupt you will get corrupt results.
BA Q1 results are out.
Another loss ($0.49 per share), though less than analysts expected.
BDS and BGS made a profit; BCA made a loss (of $537M on revenue of $8.147B)
Cashburn was $2.29B.
Interest expense for the quarter was $708M.
This article is really honest and shows the real problems behind Boeing. I hope Boeing can truly change so that employees are not afraid to speak the truth.