Boeing scrambles to raise cash, the other B word surfaces
As reported across general media, Boeing plans to raise up to $25 billion through debt or equity over the next three years, including securing a $10 billion credit line, to counter growing costs from a strike by 33,000 machinists, which has halted most commercial aircraft production in the Seattle area. Talks with the union broke down, intensifying financial strain, with the strike costing Boeing an estimated $1.3 billion monthly. The company is also facing a possible credit downgrade by S&P Global Ratings due to its rising debt, which has grown to $58 billion and plans to cut 17,000 jobs. The company has struggled since the 737 Max crashes in 2018 and 2019, leading to delays in certification of the 737 Max 7 and 9 and 777X.
Some suggest Boeing may need to raise funds through equity to avoid bankruptcy risks, as raised by Tim Clark, CEO of Emirates. Despite these pressures, Boeing’s stock rose slightly on Tuesday.
In other news, Delta announced it would begin cabin retrofits with its quarter-century-old 757s, a fantastic Boeing product the company elected not to replace.