Strikes may be more commonly associated with Europe, but they are hitting close to home for Boeing in Seattle, where the aerospace giant has significant commercial aircraft manufacturing operations currently idled due to labor disputes. Over the decades, Boeing has faced numerous industrial actions, with seven strikes lasting over two weeks since 1948. The latest strike is particularly critical, arriving at a pivotal moment for the company.

Before the labor unrest began, Boeing was already grappling with severe issues. The company is reportedly losing more than $1 billion monthly due to production rate reductions mandated by safety regulators. The crisis was catalyzed by a troubling incident in January when an emergency door plug fell from an Alaska Airlines aircraft during flight, prompting a series of investigations and management changes that have left Boeing reeling.

The strikes have compounded Boeing’s difficulties, with two contract proposals rejected by the International Association of Machinists and Aerospace Workers, representing 33,000 workers on the assembly line. The labor movement has brought to light growing dissatisfaction among employees towards management, intensifying scrutiny on the company’s culture and leadership problems.

The added visibility of the strikes has amplified concerns over Boeing’s financial stability. At the year’s start, stakeholders anticipated a phase of profitability and debt reduction following years of turmoil arising from two deadly crashes involving the 737 Max in 2018 and 2019, which left Boeing with an estimated $45 billion in debt—approaching half of its current market value.

Despite these challenges, optimism had returned as airlines sought to refresh their fleets post-pandemic grounding. Boeing and Airbus effectively dominate the commercial airliner market, with substantial backlogs; Boeing’s at 6,500 orders, indicating up to eight years of production ahead.

Initially, shareholders anticipated that this demand would boost profitability and share prices. Indeed, share prices rose from $179 in October to over $260 shortly before the recent Alaska Airlines incident. Even following the door plug mishap, investors remained hopeful about Boeing’s recovery, provided the fallout could be contained.

Recent weeks, however, have seen that optimism wane as Boeing’s compounding issues have drawn closer scrutiny from safety regulators. Whistleblower reports and inspections have revealed ongoing quality control issues, prompting the National Transportation Safety Board to issue urgent safety instructions pertaining to potential rudder issues on some aircraft. The Federal Aviation Administration chief emphasized that restoring Boeing’s culture and compliance could take “years.”

Meanwhile, heightened oversight has spotlighted emerging problems in Boeing’s other sectors. The defense segment, which ranks as the Pentagon’s fourth-largest supplier, is currently experiencing losses, and its leader departed unexpectedly last week. Additionally, technical difficulties with Boeing’s new Starliner spacecraft have left two astronauts in limbo aboard the International Space Station.

Matthew Akers from Wells Fargo was among the first analysts to voice caution, downgrading Boeing’s stock to “underweight” in a recent report titled Cash Opportunity out the Door. He posited that although a significant influx of cash flow from aircraft sales was anticipated this decade, production delays and rising costs may coincide with the company’s new investment cycle instead.

Akers suggested that while Boeing can expect some revenue from aircraft sales, the necessary cash will largely be absorbed by the hefty investment required for launching a new aircraft model, which Boeing’s former CEO estimated could cost around $50 billion.

Although Boeing assured investors it aimed for a free cash flow of $10 billion annually, Akers now believes that projections are overly ambitious, estimating peaks around $10 billion occurring in 2027—considerably later than planned. This delay comes as new aircraft development expenses begin threatening market share against competitors like Airbus.

Kelly Ortberg, who recently took over as CEO from Calhoun, faces immediate challenges surrounding ongoing strikes, as production is impossible without adequate labor. Negotiated talks between Boeing and the union are anticipated to resume soon. Addressing the cultural changes demanded by safety regulators also looms as a significant undertaking.

Moreover, Boeing’s financial future hinges on the need for substantial capital. Analysts predict that the company may require up to $30 billion in new equity, potentially through rights offerings or by attracting new investors. Timing is crucial for Ortberg; ideally, he would engage investors after resolving labor disputes and restoring full production capacity.

Currently, Boeing has around $12 billion in cash and an additional $10 billion in undrawn credit facilities, providing a cushion of about a year, although opinions vary on the available margin for error. The challenge remains whether to approach investors with a refined narrative or delay and risk depletion of available funds.

The U.S. government remains a key player in the background, historically stepping in to support companies vital to national security, a scenario that may repeat in Boeing’s ongoing challenges.

Dominic O’Connell serves as a business presenter for Times Radio