Aircraft Business & Finance News

Boeing Says It May Reject Aid If Treasury Demands Equity Stake

Boeing stands to qualify for billions of dollars in aid from the U.S. government as part of a $2 trillion coronavirus aid package, including a $17 billion carve-out for companies deemed essential to the country’s national security, but the conditions might prove too unpalatable for CEO David Calhoun. The Boeing boss told the Fox television network that the company would reject any money tied to the government taking an equity stake in the aerospace giant.

Before the Senate voted unanimously to pass the rescue bill now before the House of Representatives, Boeing called for a $60 billion injection for itself and its supply chain. At the time, however, it remained unclear whether or not the government would require taking partial ownership of the company as a condition of the support. Now, as the House prepares to vote on the measure, Boeing seems willing to go its own way and look for private sources of funding.

“Nobody has an interest in retaining government equity in their company,” said Calhoun. “We want to pay everything back. Everybody does, and to think that’s not our motive is sort of silly. I don’t have a need for an equity stake,” he added. “If they force this, we just look at all the other options and we’ve got plenty of them.”

One Boeing board member—former secretary of state Nikki Haley—last week resigned in protest of the company’s stated willingness to accept government aid. “I cannot support a move to lean on the federal government for a stimulus or bailout that prioritizes our company over others and relies on taxpayers to guarantee our financial position,” she wrote in her resignation letter. “I have long held strong convictions that this is not the role of government.”

For its part, Boeing applauded the legislation in a statement released Thursday. “We thank the Administration, especially the President and Secretary Mnuchin, as well as Congress for working together to take swift bipartisan action to support the American economy, including the 2.5 million jobs and 17,000 suppliers that Boeing, the aerospace industry, and the U.S. rely on to maintain our world leadership in commercial, defense, and services,” it said. “The bill’s access to public and private liquidity, including loans and loan guarantees, is critical for airlines, airports, suppliers, and manufacturers to bridge to recovery.” 

A day earlier Boeing completely suspended production at its Puget Sound-area facilities amid a declared state of emergency in Washington state and what the company calls its continuous assessment of the accelerating spread of the coronavirus in the region. The suspension includes the company’s narrowbody plant in Renton, its widebody facilities in Everett, and its Auburn and Frederickson fabrication plants. 

The move came after several Boeing line employees contracted the Covid-19 virus, one of whom—an inspector at its Everett plant—died from the illness.