Boeing signalled today that it could raise up to US$25 billion (NZ$41.2 billion) in new stock or debt to shore up its balance sheet after years of heavy losses.
The company said in back-to-back regulatory filings that it could raise the cash over the next three years. It also entered into a new US$10.3 billion (NZ$16.9 billion) credit agreement with lenders to provide short-term protection against a cash crunch.
Boeing hasn't earned an annual profit since 2018, losing more than US$25 billion (NZ$41.2 billion) since, after two 737 Max jets crashed, killing 346 people. Its finances are under new pressure as a strike by factory workers who build most of its airline jets goes into its second month. The strike is cutting into cash, which Boeing receives when it delivers new planes to buyers.
The strike is also getting the attention of the Biden administration. Julie Su, the acting labour secretary, visited Seattle and met with the union and Boeing on Tuesday, according to the International Association of Machinists and Aerospace Workers.
Boeing workers packed a union hall for raucous rally Wednesday that was intended to show solidarity among strikers.
Boeing machinists, labour allies and elected officials rally in Seattle at their union hall. (Source: Associated Press)
"We could talk about solidarity, but when you see it, it definitely lifts you up," said Sergio Lombardo, who has worked at Boeing for 14 years.
Jeff Cook, a quality inspector with 28 years at Boeing, said the rally sends a message to Boeing's corporate officials "that we're not just going to lie down. We have been lying down for them for 16 years, and it's just not going to fly anymore."
Boeing has burned through more than US$1 billion (NZ$1.6 billion) in cash and ended September with US$10.3 billion (NZ$16.9 billion) in cash and securities.
On Friday, new chief executive Kelly Ortberg said Boeing would cut about 10% of its workforce — around 17,000 jobs — and pushed back the launch of a new model of its large 777 airliner.
Production of current models of the 777 and Boeing’s best-selling plane, the 737 Max, have been halted by the strike.
Boeing's securities filings Tuesday are called shelf registrations, which indicate that a company has the ability to raise funds without committing to doing anything.
The company also reported that to provide near-term liquidity, it entered into a new supplemental credit agreement with units of Bank of America, Citibank, Goldman Sachs and JPMorgan Chase.
Fitch Ratings said the announcements increase Boeing's financial flexibility and ease near-term liquidity concerns. Management's ability to tap capital sources other than debt "will help alleviate downgrade risks" by improving the prospects for paying off debt that matures in 2025 and 2026, Fitch said.
Standard & Poor's said last week it was considering cutting Boeing's credit rating.
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