Boeing Company (The)

Good day, everyone, and welcome to the Boeing Company's first quarter 2024 earnings conference call. Today's call is being recorded. The management discussion and the slide presentation, plus the analyst question and answer session, are being broadcast live over the internet. To ask a question on today's conference, please press the digit 1, followed by the digit 0 on your touchstone telephone. Again, it's 1-0 for questions. After pressing 1-0, you will hear that you have been placed in queue. Pressing 1-0 again will take you out of queue and may prevent you from being able to ask a question. At this time, for opening remarks and introductions, I'm turning the call over to Mr. Matt Welch, Vice President of Investor Relations for the Boeing Company. Mr. Welch, please go ahead.

Thank you, and good morning, everyone. Welcome to Boeing's quarterly earnings call. I am Matt Welch, and with me today are Dave Calhoun, Boeing's President and Chief Executive Officer, and Brian West, Boeing's Executive Vice President and Chief Financial Officer. As a reminder, you can follow today's broadcast and slide presentation at Boeing.com. As always, detailed financial information is included in today's press release. Furthermore, projections, estimates, and goals included in today's discussion involve risks, including those described in our SEC filing and in the forward-looking statement disclaimer at the beginning of the web presentation. In addition, we refer you to our earnings release and presentation for disclosures and reconciliation of certain non gap measures. Now I would turn the call over to Dave Calhoun.

Thanks, Matt. Good morning and thanks for joining us. Although we report first quarter financial results today, I will direct my comments toward the dramatic actions we've taken since the Alaska Airlines accident in January. We began with taking responsibility. We immediately and transparently began supporting the NTSB to identify the cause of the accident. We supported the FAA investigation of the 737-9 fleet in its entirety to do comprehensive airline inspections and the aircraft were cleared to go back into service. We immediately acted, working alongside our supply chain to ensure the door plug depressurization event doesn't ever happen again. We held quality stand downs across all of our production lines in BCA and sought the advice and counsel of more than 70,000 employees to improve our factory disciplines and adherence to our quality standards. All in all, we collected over 30,000 ideas and the list continues to grow. We have categorized and prioritized all. Employee engagement has been energizing for all. Actions are being taken across all of our factories and areas of focus include training, particularly on the job, taking advantage of our slowdown and adding hundreds of hours of training for each of our manufacturing employees. Tooling, more of it and improve maintenance. Work instructions, simplify, simplify, simplify. Compliance checks, discipline, traveled work controls, don't travel work, incentive structures, employee listening, and maybe above all, culture improvement. We transparently engaged with the FAA and immediately went to work on a 90-day plan of quality action to drive improvements throughout our production system. We completed our 30-day review, and we're regularly checking in with the FAA as we complete our 90-day plan. We engaged a team of independent quality experts to systematically review our quality control process and bring forward long-term recommendations. They are roughly 60 days into their work, beginning with Renton and Spirit, and we expect them to stay for several years. We have appointed several new leaders into critical BCA leadership roles in the last couple of months. All have jumped in with both feet alongside our world-class workforce. They are seasoned operators and all with a critical eye. Effective March 1, we moved inspection and rework teams to Wichita. Since then, we have only allowed fully inspected fuselages to be shipped to Renton. which has dramatically reduced our non-conformances entering the Renton factory. This started as a trickle and it has been slowly improving as time goes on. The visibility in Wichita will help the SPIRIT team prevent non-conformances from being created in the first place. We are already beginning to see signs of more predictable and reduced cycle times in our factory as a result of these enhanced quality control standards. We expect this will continue to improve. We've extended our commitment to reduce traveled work across all of our assembly lines and deep into our supply chain. While near term delivery shortfalls hurt and will affect our performance during our first half of the year, the long term benefits from a synchronized supply chain will be substantial. We are absolutely committed to doing everything that we can to make certain our regulators, our customers, and most importantly, our employees and the flying public are 100% confident in Boeing. And while I have shared my plans to step down as CEO by the end of the year, I will be very focused every day on seeing that commitment through. As we move through this period, it is important that our people and our stakeholders understand how promising Boeing's future looks. Demand across our portfolio remains incredibly strong. Our people are world class. There's a lot of work in front of us, but I'm proud of our team and remain fully confident in our future. While this effort will slow our recovery timing, we are now seeing these proof points. that give us confidence that we'll begin to stabilize and improve performance moving forward. By the end of this year, we expect to have largely delivered our 737 and 787 inventory, effectively shutting down our two large shadow factories. Our commercial business will be more stable. Our defense unit will be progressing toward more historic levels of performance. and our services team will continue to deliver exceptional results. And most importantly, we will have embedded all of the important lessons we've learned in the last few months and over the last several years. During that time, I've had the opportunity to speak to many of our frontline team members, engineers and mechanics. I continue to be amazed by the pride they take in their work, their commitment to getting things done the right way, the safe way. their willingness to raise their hands and offer ideas for how to do things better. With that, I'll turn it over to Brian.