It’s time for Boeing CEO to go straight to union leadership: Expert

Boeing was in tremendous trouble long before the machinist strike, which is in its second month and costing the company $1 billion per month. Since the strike started, things have gone from bad to worse, and it's not all strike related.

On Friday, Oct. 18, the Federal Aviation Administration opened a new safety review into Boeing as part of its "aggressive oversight to ensure Boeing has the right tools to sustain lasting changes to its safety culture." The announcement comes after the Transportation Department criticized the FAA's oversight of the company.

And while Boeing is bleeding cash from the strike, the company secured a $10 billion credit line from banks and told the Securities and Exchange Commission it is considering raising more funds through a stock sale. The company's credit rating is at risk of becoming "junk."

But Boeing and its employees, many of whom are facing furloughs or layoffs , aren't the only ones cut deep from the absence of 33,000 machinists . On Friday, the downstream effect of the strike became clear when Boeing supplier Spirit AeroSystems announced it would furlough 700 workers for 21 days as the strike eats into its cash and inventory space.

Boeing CEO Kelly Ortberg is only about two months into the job and inherited most of Boeing's troubles. But the strike negotiations since he took the reins have backfired and further driven a wedge between the company and its workers.

"It's fair to say, I'm concerned. I don't think this is Ortberg so much as Boeing operating the way that it has always operated for the last generation or so, but it may be time for him to step in," said Gautam Mukunda, leadership expert and author of "Indispensable: When Leaders Really Matter."

Mukunda previously detailed the longstanding cultural issues and leadership failures at Boeing in an extended interview with Straight Arrow News after Boeing hired Ortberg. A month after that conversation, SAN followed back up with Mukunda.

"Things are not going better so far for them, and that's tough," he said. "Ortberg [has] the opportunity to change the culture. That doesn't mean that he will. It just means that he could, if he wanted to, and that's going to be a multi-year process, and this will be the first step."

While he says it is not typical for CEOs to take center stage in labor negotiations – "He's got plenty of things that he's got to manage, including Boeing's horrific legal difficulties, which they're still going through" – this might be an instance where that would be beneficial.

"He should meet with the union leaders directly," Mukunda said. "It's time for him to go past the negotiators and say, 'I'm the CEO of Boeing but I'm new, right? I wasn't here. All the awful things that my predecessors did to you , I didn't do them. Give me a chance, and we're going to make this happen.' Even if that doesn't resolve the strike immediately, it will at least indicate the seriousness and start to repair the cultural damage."

But that's just step one, Mukunda said. For what Ortberg needs to do next, watch the full interview in the video above.

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