Boeing plans to raise over €17bn amid worker strike

Boeing employees work the picket line after union members voted to reject a new contract offer from the company last week. Picture: Lindsey Wasson/AP

Boeing has announced moves to raise as much as $19bn (€17.6bn) as it tries to shore up its finances amid a costly worker strike and an ongoing crisis about the safety of its airplanes.

The US manufacturer said on Monday it would sell 90m common shares, raising about $14bn (€12.9bn), plus another $5bn (€4.62bn) in depositary shares.

The company had last week said it was hoping to raise up to $25bn in new capital through a stock and debt offering, plus a separate $10bn through a credit facility with a consortium of lenders.

Monday's long-awaited stock offering will give Boeing a financial cushion as its chief executive, Kelly Ortberg, tries to deal with the steep costs of the strike by 33,000 workers, while also solving production problems that this year renewed focus on the manufacturer’s safety culture and delayed its new 777X jet.

Adding to its troubles, problems with Boeing’s Starliner spacecraft — which had to return to Earth last month without two astronauts who were left on the International Space Station — have dealt a blow to its space division.

The share offer could help Boeing to stave off the prospect of a downgrade of its debt from investment grade to “junk” status by one of the three big credit-rating agencies. Such a downgrade could make it more expensive for the company to borrow, particularly given its enormous $58bn debt pile.

Boeing last week reported a $6bn quarterly loss up to the end of September, and it is bleeding money from the strike action. Last month, it announced a plan to cut 17,000 jobs.

Members of the International Association of Machinists and Aerospace Workers union last week voted to reject a pay offer from Boeing that was brokered in part by Joe Biden’s administration.

The strike began on September 13, and continued despite the offer of a 35% wage increase over the four-year contract. Boeing workers are holding out for a better deal after years of lagging pay, including the restoration of a defined-benefit pension plan they lost a decade ago.

The manufacturer has fallen far behind its European rival, Airbus, since two fatal crashes in 2018 and 2019 of its bestselling plane, the 737 Max.

The company has since lurched from crisis to crisis. As well as the huge drop in air travel during the covid pandemic, it had continued production problems on other planes, and a mid-air door panel blowout in January put the focus back on its safety record. Regulators forced Boeing to slow production to address issues.

• The Guardian