If you took a plane to your last vacation destination, chances are you were sitting in a Boeing plane! Boeing has over 10,000 active planes with airlines and many more on backorder. However, the once-successful plane manufacturer has found itself in a crisis situation. They’re planning to borrow Billions of Dollars to try to stay afloat, but the future of the company is not certain!
The Cause Of The Crisis
It is not quite common, but even the largest companies in the world sometimes have monetary struggles. This is especially the case for Boeing! In the past few years, they have had multiple operational and safety problems, leading investors to turn away from the company.
One of the main problems the company is facing is the safety issues with their most sold plane model, the Boeing 737. In less than 12 months 2 of these planes crashed, killing 346 people! The company agreed to plead guilty and pay the fines that would be just under 500 million dollars to all the families. Multiple Whistleblowers have mentioned that Boeing is prioritizing profits over safety and quality, which both of the plane crashes were proof of!
Another cause for the financial crisis of Boeing is that there was a massive strike with more than 33.000 employees participating. This completely disrupted the production of new planes and made everything come to a complete stop. However, the company has over 6000 planes on back order which they still have to fulfil!
Boeing’s Plan to get back on top
To get themselves out of the situation and to provide the workers with adequate solutions to their problems, Boeing has turned to multiple banks to try and borrow money. However, this is not just a simple mortgage loan, we’re talking about billions of dollars to save the company from going under. The total amount they’re asking from different banks is 10 billion dollars! Next to the financial aid the banks would provide, the company also wants to sell stocks and debt to raise even more money.
In total Boeing wants to raise 25 billion dollars, 10 billion from the banks and 15 billion by selling debt and stocks into the company! If they’re not able to do this, the company will either go bankrupt or will have to scale down a lot to survive! In the stock market, the company is on the verge of becoming a “Junk-Stock”.
