Boeing is exploring asset sales and seeking to raise billions of dollars in an effort to stabilize its finances, according to a report by the Wall Street Journal. The aerospace giant has been grappling with significant financial challenges, exacerbated by a strike involving 33,000 union workers, ongoing operational and safety issues, and a slow recovery from the grounding of its 737 MAX aircraft. In addition to the planned asset sales, Boeing recently reached an agreement to sell a small defense unit that produces surveillance equipment for the United States military.
The company’s financial struggles intensified after a series of crises, including the loss of a door panel on a 737 MAX in January 2024, which further damaged its safety reputation. Boeing’s financial outlook has worsened, with new CEO Kelly Ortberg overseeing job cuts, including a planned reduction of 17,000 positions—roughly 10% of its workforce. The company is also facing a credit rating downgrade, as its debt has ballooned from $10.7 billion in early 2019 to $53 billion by mid-2024.
To address its cash flow problems, Boeing plans to raise $25 billion through stock and debt sales, with an initial $10 billion secured from a consortium of banks. However, its debt crisis, coupled with halted production of key aircraft models like the 737 MAX, 767, and 777 due to the ongoing machinists’ strike, has raised concerns about its future financial stability. Talks between Boeing and the International Association of Machinists have stalled, leaving the company’s production capabilities severely constrained.
Boeing’s board recently met to evaluate the value of its divisions, prompting discussions on which assets could be sold to improve liquidity. The company’s credit rating has fallen to the lowest investment-grade level, just above “junk” status, which would significantly increase its borrowing costs if further downgraded.
Expanded Coverage:
