Post by andypspotter on Mar 22, 2020 12:15:40 GMT
Boeing Co. is edging closer to winning a government bailout as the once-mighty company races to secure a lifeline amid the aviation industry’s worst crisis in decades.
Backstop financing would start to slide into place next week if the U.S. Congress approves a Senate Republican proposal to provide as much as $208 billion in collateralized loans and loan guarantees for companies and industries jeopardized by the coronavirus pandemic. Boeing called this week for $60 billion in aerospace aid, mostly for itself.
With a global recession looming, the U.S. planemaker -- erstwhile symbol of American manufacturing might -- is worried about safeguarding its operations and keeping thousands of suppliers afloat through a disruption that could linger for months. Airlines are postponing deliveries of new jets and requesting aid of their own as consumers hole up at home because of the outbreak. Delta Air Lines Inc., for example, is burning through $50 million dollars a day.
“We are getting good signals from the Hill,” said Eric Fanning, head of the Aerospace Industries Association, a trade group representing civil aviation and defense manufacturers whose employees make up nearly 20% of the U.S. factory workforce. “At a time of crisis, liquidity and cash flow are critical.”
Boeing’s dimming prospects were reflected in a staggering share collapse. Boeing tumbled 44% this week to $95.01 at the close Friday, the lowest in almost seven years. The shares have tumbled 73% since their 2020 high last month, wiping out $142 billion in market value.
Loan Guarantees
The company would likely qualify for government-backed loan guarantees under the proposal crafted by Republican leaders Roger Wicker, chairman of the Senate Commerce Committee; Richard Shelby, chairman of the Senate Appropriations Committee and John Thune, the Senate Majority Whip.
While the details were still being hammered out Friday, Boeing might be able to collect the aid without a showdown in Congress, where some of the company’s fiercest critics are investigating two deadly crashes of the company’s 737 Max jet.
That’s because $150 billion in assistance would be distributed by Treasury Secretary Steve Mnuchin to entities that he determines are in jeopardy -- without Congressional approval. Lawmakers are also considering proposed relief of $58 billion in loans for passenger and cargo airlines.
The government might also take warrants or equity stakes in the companies it assists, under the measure. A vote on the stimulus package could come as soon as Monday.
Backstop financing would start to slide into place next week if the U.S. Congress approves a Senate Republican proposal to provide as much as $208 billion in collateralized loans and loan guarantees for companies and industries jeopardized by the coronavirus pandemic. Boeing called this week for $60 billion in aerospace aid, mostly for itself.
With a global recession looming, the U.S. planemaker -- erstwhile symbol of American manufacturing might -- is worried about safeguarding its operations and keeping thousands of suppliers afloat through a disruption that could linger for months. Airlines are postponing deliveries of new jets and requesting aid of their own as consumers hole up at home because of the outbreak. Delta Air Lines Inc., for example, is burning through $50 million dollars a day.
“We are getting good signals from the Hill,” said Eric Fanning, head of the Aerospace Industries Association, a trade group representing civil aviation and defense manufacturers whose employees make up nearly 20% of the U.S. factory workforce. “At a time of crisis, liquidity and cash flow are critical.”
Boeing’s dimming prospects were reflected in a staggering share collapse. Boeing tumbled 44% this week to $95.01 at the close Friday, the lowest in almost seven years. The shares have tumbled 73% since their 2020 high last month, wiping out $142 billion in market value.
Loan Guarantees
The company would likely qualify for government-backed loan guarantees under the proposal crafted by Republican leaders Roger Wicker, chairman of the Senate Commerce Committee; Richard Shelby, chairman of the Senate Appropriations Committee and John Thune, the Senate Majority Whip.
While the details were still being hammered out Friday, Boeing might be able to collect the aid without a showdown in Congress, where some of the company’s fiercest critics are investigating two deadly crashes of the company’s 737 Max jet.
That’s because $150 billion in assistance would be distributed by Treasury Secretary Steve Mnuchin to entities that he determines are in jeopardy -- without Congressional approval. Lawmakers are also considering proposed relief of $58 billion in loans for passenger and cargo airlines.
The government might also take warrants or equity stakes in the companies it assists, under the measure. A vote on the stimulus package could come as soon as Monday.
