Boeing Co (NYSE: BA) is set to present a corrective action plan to U.S. regulators to address significant quality issues within its factories.
This move is part of the aerospace giant's efforts to recover from a crisis that began with a near-disaster involving a 737 Max aircraft earlier this year.
CEO Dave Calhoun and Stephanie Pope, the head of Boeing's commercial airplane division, will meet with Federal Aviation Administration Chief Michael Whitaker on Thursday in Washington to discuss the plan, Bloomberg reports.
Boeing aims to regain trust from customers, regulators, and legislators following months of damaging publicity related to its 737 Max planes and other quality control issues, including concerns over the inspection processes for its 787 Dreamliners.
Boeing's top executives are expected to detail their approach to improving factory conditions and ensuring stringent quality checks.
This follows a series of incidents that have put the company under intense scrutiny. Calhoun emphasized the importance of the FAA's thorough review of Boeing's plan during the company's annual general meeting earlier this month.
The ongoing challenges have severely impacted Boeing's finances, with the company projected to burn through approximately $8 billion in cash in the first half of 2024.
Amid these financial strains, the board is also in the process of identifying a successor for Calhoun, who will step down as CEO later this year.
Boeing has significantly slowed the production of its 737 aircraft and increased inspections at Spirit AeroSystems Holdings Inc. (NYSE: SPR), the primary supplier of the jet's body.
The planemaker has implemented extensive employee training and simplified work instructions to address these issues, particularly for new hires.
The FAA has mandated that Boeing cannot increase its 737 production rates until it is confident in the manufacturer's quality controls. This directive came after an incident in January where a door plug blew out of a nearly-new 737 Max due to poor workmanship.
Whitaker is scheduled to brief the House Transportation and Infrastructure Committee on June 4 regarding Boeing's plans.
Boeing stock has lost more than 16% in the last 12 months. Investors can gain exposure to the stock via IShares U.S. Aerospace & Defense ETF (NYSE: ITA) and Invesco Aerospace & Defense ETF (NYSE: PPA).
Price Action: BA shares are trading higher by 0.50% at $172.50 in premarket at the last check Thursday.