Boeing is facing significant financial challenges as a monthlong strike by 33,000 US West Coast workers has cost the company $1bn a month. In response, the plane maker announced plans to cut 17,000 jobs, delay the delivery of its 777X jet by a year, and reported substantial losses in its defence business. CEO Kelly Ortberg stated that the company must align its workforce levels with its financial reality. Boeing shares fell 2.3 percent in after-market trading following the announcement.
In addition to the job cuts and delivery delay, Boeing is also considering options to raise billions of dollars through a sale of stock and equity-like securities. The company has about $60bn in debt and posted operating cash flow losses of over $7bn for the first half of the year. Analysts estimate that Boeing may need to raise between $10bn and $15bn to maintain its current credit ratings, which are just one notch above junk status.
Reaching a deal to end the strike is crucial for Boeing, as the company is at risk of losing its prized investment-grade credit rating. Talks between the company and the union hit an impasse earlier this week, with Boeing withdrawing its pay offer. The company also announced the end of a furlough programme for salaried employees. Despite these challenges, Boeing is focused on making strategic decisions for its future and restoring the company.
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