Boeing Seeking $10 Billion In Loans In Wake Of 737 Max Fiasco
Boeing has been knocking on the doors of the biggest banks in the world trying to secure $10 Billion in loans. This is in response to the 737 Max grounding that has been affecting their business mightily. They have already secured around $6 Billion in loans from Citigroup, Bank of America Merrill Lynch, Wells Fargo and J.P. Morgan. They continue to seek the remaining $4 Billion from other banking institutes.
It appears that this is more of a preemptive move than anything. Even with their continued issues they still have a solid credit rating and liquidity isn’t an immediate issue. Having said that the cost of the Boeing 737 Max issues are estimated to come in at close to $20 Billion when it is all said and done per CNBC. Moody’s Investors Service did say last week that it was putting Boeing’s credit rating, which is investment grade, on review for a potential downgrade due to the Max issues.
The plane has been grounded for going on 11 months now and was expected to be the largest driver of revenue for the company in 2019 and 2020. And the repercussions of the 737 Max crisis has been felt elsewhere as well. Parts suppliers and airlines have had to layoff workers and missed out on revenue forecasts because of the plane delays.
It is unclear when this situation will finally come to a close. I am not sure the 737 Max can ever recover from all of the negative news coverage if I am being honest. I fully expect a re-branding of the plane whenever it finally does get deemed safe. Let’s just hope everyone actually properly does their job this time around whenever that moment does come.
Source: CNBC & Travel Pulse
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This board is culpable as is the management in Chicago. They need to move management back to Seattle and clean house. Engineers should run that company again.
They need to change some things and the culture for sure
Just hit the wires a while ago: Boeing shares near $300 after news that the Max won’t be approved until June or July. Everyday is a fiasco for Boeing. The entire Board of Directors (including the former board member and now new CEO) must be swept away and replaced, and engineering made the focus of the company – again.
I agree, I think moving someone from the board that oversaw this to CEO wasn’t a great move. I wouldn’t be surprised if that June/July timeline is missed as well.