Boeing CFO warns 'expensive' changes are needed as company burns through billions to fix security concerns and admits prioritizing production over 'getting it done right'

The CFO of Boeing has said the company would use more cash in the first quarter than previously expected, as it attempts to fight back a worsening crisis for the plane maker. 

CFO Brian West told a Bank of America Conference that the company will spend somewhere between $4 billion and $4.5 billion.

West contested this was 'higher than we originally planned back in January' and said they would produce fewer than the maximum 38 737 aircraft allowed each month. 

That is due to a combination of lower deliveries, lower production volumes at its commercial division as well as some working capital pressure.

Quality at Boeing and supplier Spirit AeroSystems is under scrutiny following an incident in January in which a door plug blew off a 737 MAX 9 plane mid-flight. 

CFO Brian West, seen here with wife Sheri West, told a Bank of America Conference that the company will spend somewhere between $4 billion and $4.5 billion

In early January, an unused emergency exit door blew off a brand-new Boeing 737 Max shortly after take-off from Portland International, sparking a still-ongoing DOJ investigation

West said: 'We're deliberately going to slow to get this right. We are the ones who made the decision to constrain rates on the 737 program. And we'll feel the impact of that over the next several months.'

It will also take longer for Boeing to hit a goal outlined in 2022 of achieving annual cash flow of about $10 billion by 2025 or 2026.

He added: 'It's going to take us longer to get there than we planned. But we believe that the actions that we're taking right now better position us for that long term.'

West said margins at the commercial airplanes business would be 'more like negative 20%' in the first quarter, in part due to customer compensation for delivery delays. 

They will improve through the year but still be negative overall in 2024, he added. 

Quality at Boeing and supplier Spirit AeroSystems is also under scrutiny following an incident in January in which a door plug blew off a 737 MAX 9 plane mid-flight. 

The door panel that blew off the 737 MAX 9 jet appeared to be missing four key bolts, according to a preliminary report from U.S. investigators.

'For years, we prioritized the movement of the airplane through the factory over getting it done right, and that's got to change,' West said.

Boeing's share prices have plummeted within the past year following a number of incidents 

The LATAM Airlines Boeing 787 Dreamliner plane that suddenly lost altitude mid-flight, dropping violently and injuring dozens of travelers, is seen on the tarmac of the Auckland International Airport on March 12, 2024

In the January incident, an unused emergency exit door blew off a brand-new Boeing 737 Max shortly after take-off from Portland International, sparking a still-ongoing DOJ investigation. 

Last week, roughly 50 people were treated by first responders after a Boeing 787 Dreamliner flying from Australia to New Zealand experienced a 'technical event' that caused 'a strong movement' jolting passengers in their seats.

The company told airlines on Friday to start inspecting switches on pilots' seats after a report said an accidental cockpit seat movement caused the plunge.  

Shortly before the incident over the Indian Ocean, Boeing said it believed the technical failure involving the door stemmed from something that occurred during production, where required documents detailed the removal of a key part that failed were never created. 

Also on Friday, the company said it is 'committed to continuing to cooperate fully and transparently with the National Transportation Safety Board's investigation,' which, more than three months later, remains ongoing.

All of this comes after Boeing whistleblower John Barnett was found dead from in his truck in a hotel parking lot in South Carolina, seven years after retiring. 

Barnett had alleged that second-rate parts were literally removed from scrap bins, before being fitted to planes that were being built to prevent delays

The 62-year-old was found in his truck in a hotel parking lot in South Carolina, - seven years after he retired following a 32-year career with Boeing

Barnett's death came during a whistleblower suit, where he alleged under-pressure workers were deliberately fitting sub-standard parts to aircraft on the assembly line. 

Barnett had alleged that second-rate parts were literally removed from scrap bins, before being fitted to planes that were being built to prevent delays.

A 2017 review by the FAA upheld some of his concerns, requiring Boeing to take action.

He had just given a deposition to Boeing's lawyers for the case in the week before his passing, his attorney Brian Knowles said.

The Charleston County coroner, meanwhile, confirmed last week that the longtime Boeing staffer died while in town for interviews linked to the case.

Boeing also responded to the former worker's death in their own statement as news spread, saying it was 'saddened by Mr. Barnett's passing.'

The statement did not address any aspects of the case, but ultimately added: 'Our thoughts are with his family and friends.'

A Boeing plane was recently forced to land due to hydraulic fluid spewing from its landing gear area. Now being investigated, the technical failure also occurred in mid-air on a United flight

Barnett's job for 32 years was overseeing production standards for the firm's planes - standards he said were not met during his four years at the then-new plant in Charleston from 2010 to 2014. 

'The new leadership didn't understand processes,' Barnett told Corporate Crime Reporter in an interview in 2019 of how brass allegedly cut corners to get their then state-of-the-art 7878s out on time.

'They brought them in from other areas of the company,' he continued, two years after retiring in 20017.

'That entire team came down,' he went on. 'They were from the military side. My impression was their mindset was - we are going to do it the way we want to do it. 

'Their motto at the time was - we are in Charleston and we can do anything we want.'

Barnett claimed he alerted superiors at the plant about his misgivings, but no action was ever taken. Boeing denied this, as well as his claims.

A 2017 review by the Federal Aviation Administration (FAA) went on to stand up some of Barnett's qualms, including finding that at least 53 'non-conforming' parts - as they put it - were misplaced, and considered lost.

The firm is now under criminal investigation for the door incident on the Max plane this past January