Boeing Announces Capital Increase Amid Losses and Strikes
The aerospace manufacturer Boeing, currently facing financial losses and impacted by a strike, has revealed plans to raise around $19 billion to bolster its cash reserves. This move comes as the American aircraft maker reported its largest quarterly loss in four years, exceeding $6 billion, following a series of accidents and issues plaguing its aircraft. Additionally, Boeing is grappling with a strike involving over 33,000 workers that has halted operations at its two main factories since September 13.
Capitalization Measures and Workforce Reduction
To enhance its financial position, Boeing will offer 90 million common shares valued at approximately $13.9 billion at current market prices, along with $5 billion in depositary certificates. In recent weeks, the company has implemented steps to safeguard its liquidity, including a planned 10% workforce reduction globally, with nearly 171,000 employees expected by the end of 2023. Furthermore, there are considerations to divest its space activities to streamline operations and boost its financial stability.
Challenges from Strikes and Previous Setbacks
Despite ongoing efforts to stabilize, Boeing continues to face significant labor unrest. Workers in the Seattle area rejected the latest social agreement proposed by the company, extending the strike that has halted operations at two critical plants for over a month. Boeing’s recovery has been hindered by the aftermath of the 737 MAX 8 crashes in 2018 and 2019, which resulted in 346 fatalities, in addition to the impacts of the Covid-19 pandemic. Notably, Boeing has incurred over $31 billion in net losses from the beginning of 2020 through the end of September 2024, as reported by Agence France-Presse.
Leave a Reply