Cancellations for Boeing Aircrafts are Outpacing New Orders

The month of May was a rough one for Boeing as the company’s backlog of aircraft went down to 4,774. This is the smallest backlog for Boeing since 2013.

The company had logged nine orders and 18 cancellations in May, which also included a switch of a different delivery slot for a 747 freighter for UPS. Most of the cancellations had been for the 737 Max, the kind of jet that had been in two fatal crashes in recent years.

In other news, the company’s CEO wrote a letter to employees addressing racism.

Boeing President and CEO Dave Calhoun wrote:

Team,

A little over a week ago, after seeing George Floyd die under the knee of a police officer in Minneapolis, I posted my reaction to his death, my condemnation of discrimination and harassment, and my expectation that Boeing and its leaders will have zero tolerance for bigotry of any kind in this company.
Your response to that message has been overwhelming. Many of you expressed your appreciation. Some shared deeply moving stories about the effect of discrimination in your own lives. A few frankly questioned the commitment of the company to the values I expressed.

But I was most affected by the large number of you who wanted to see us — and me — do more.

I’ve read your responses. I’ve listened carefully in numerous talks with Boeing people all over the enterprise, in lengthy discussions with my executive team last week, and in conversations with my counterparts at other companies.

I am proud of Boeing leaders’ commitment to this and the progress we have made over the years.

But all my conversations over the last two weeks have reinforced for me an obvious point: What’s happening across the U.S. now goes beyond discrimination and harassment, beyond diversity and inclusion. What we’re seeing is the ongoing human cost of historic and persistent racial inequality in the United States.

And a second obvious point: As a company and as human beings, we need to work even harder at doing something about it.

Boeing has long been committed to the principles of diversity and inclusion, and the efforts we have made — often quietly and behind the scenes — have been meaningful.

But here’s what we’ll do to take that commitment to the next level:

We’re going to turn up the volume on dialogue within the company. I am encouraging all Boeing leaders to engage on this subject in a way that is authentic to them and meaningful to the people they lead. These won’t be — in fact should not be — comfortable discussions. Earlier today, we rolled out a conversation guide for leaders and other resources to help you through them.

We’re going to redouble our determination to drive out behaviors that violate our values and injure our colleagues. For anyone wondering what that means, here’s an example: About 10 days ago a Boeing employee made an abusive and harassing racial remark to a colleague in one of our facilities. He was quickly suspended, never returned to the workplace, and is no longer a Boeing employee. When these things happen, you will know about them. I am always transparent and will be so especially on the subject of prejudice.

We are going to strengthen our expectations for living our values at Boeing by raising the bar for progress on key measures of equity and opportunity for our people — and making ourselves accountable for clearing that bar.

Over the next four years we’re going to double the $25 million we have already invested in partnerships that create a range of opportunities for marginalized communities.

We’re going to reach out to other companies on ways to drive broad and consistent change across our industry.

Every member of my team has committed personally to confronting racism and building more inclusive opportunities — both inside our company and in our communities. That means, among other things, understanding more about the role that law enforcement and the criminal justice system can play in overcoming, not perpetuating, the unfair gap that divides the experience of our black colleagues and neighbors from the rest of us.

This is not an issue of the week or the month or even the year. These commitments will be an even more permanent and visible aspect of how Boeing conducts itself as a company. It’s the part we can play in capturing this moment to help solve a problem that has for so long prevented our society from being as inclusive and just as it should be.

Stay safe.

Boeing shares fell nearly 6% to close at $216.74.

Disclaimer: We have no position in Boeing Co. (NYSE: BA) and have not been compensated for this article.