Cash-starved Boeing, contending with massive financial losses from a crippling strike and years of operational and safety problems, is turning to major banks and Wall Street to raise tens of billions of dollars in cash.
In a regulatory filing early Tuesday, the company announced plans to borrow $10 billion from a consortium of banks. It also separately announced plans to raise $25 billion by selling stock and debt.
The company’s debt surged in the last six years as Boeing reported core operating losses of more than $33 billion. Its commercial airplane production has ground to a near halt by a month-long strike by 33,000 members of the International Association of Machinists.
There’s so many things that went wrong at Boeing, not the least of which is a lack of technical competency in upper management. However, this is how capitalism is supposed to work: Old companies make mistakes or become too big/inefficient and die while new ones rise up to replace them.
The regulations surrounding aircraft should be all that’s necessary to ensure their safety… If Boeing dies that will mean loads of opportunities for new competitors to spring up and replace them.
You can’t rely on a market with only two players for long; let Boeing die and break up Airbus if they abuse their resulting monopoly. If necessary, subsidize competition and treat the existing monopoly as a hostile player until there’s real competition.
You may think, “but airlines are too big to fail” and to that I say, “bullshit!” There’s a million ways to make safe airplanes and just as many ways to improve how Boeing was doing things. The short term will likely suck but the long term will leave us better off.
Except building the technical and logistical capability to build planes on the scale of Boeing takes decades of effort and billions in investments. And in that time, one of the major logistical lynchpins for the entire US economy is just fucking gone. That’s not just going to suck in the short term, that’s going to cripple us as a country for fucking decades.
But yeah, free market, weee!
There’s smaller companies like Boom which would probably love to get so much space and opportunity for cash flow just producing parts while they develop their own planes. Lockheed Martin while mostly military nowadays used to be in the consumer space and could also probably be talked into taking some of the load.