Congressional delegation urges Boeing to take federal funding

April 7, 2020, (c) Leeham News: The Democratic members of the Washington State Congressional delegation urged Boeing CEO David Calhoun to take federal emergency funding to protect employee wages.

The Republican members did not sign the letter.

Calhoun previously said if an equity stake is required, Boeing would reject it and seek funding through other unspecified options.

The letter is below.

WA Letter to Boeing on COVID-19 Relief Funds_04.06.20


33 Comments on “Congressional delegation urges Boeing to take federal funding

  1. PRESS RELEASE – Boeing Corporation

    Well uh, gosh, gee if we must… thanks!

    We note that since this is not for Boeing’s benefit, but rather to safeguard workers, Boeing will not accept a government equity stake or other constraint being imposed on Boeing.

    • Arrogantly and self serving correct?

      Boeing Press Release:

      Hand Out Desparelty Needed: Will Pork Barrel for Money: Of course we demand the right to have our gold plated toilets and parachute plans. Anything less is a slurr on our fine work force and Boeing who would never dramliner of taking out perks away.

      • Im still thinking that Boeing saying it ‘doesnt need Federal funding’ is just semantics.
        What Boeing could wants is for its suppliers to take the federal money instead and and Boeing doesnt pay them for all the airframe assemblies or internal systems and jet engines supplied to the FAL until Boeing gets paid for a delivered airliner.

  2. For a hypothetical 6 month shut down of the airlines or Boeing, does this gov aid cover 100% of the employee costs, or only a portion of it?
    What’s the payroll at Boeing? What’s the payroll at one of the big four? Maybe 2 billion a month? A bill of 50B to 100B with only 25B in the pot so far. The financially correct course of action for Boeing or an airline seems unclear at this point.

    • Do you even know where the 787 sections come from ?
      All the tail sections from Washington state . I dont know what is happening with the other large section from Japan, but not likely to be great. Spirit in Witchita has shut its plants , they make the 787 nose section.
      Not got all the parts means you cant build any planes

    • when do you think that they will announce officially the obvious: a permanent shutdown of CHARLESTON?
      Mrs HALEY left the board a couple of weeks ago..
      The WB capacity is far too high, and for many years…

      • Duke:

        When done reading the following let me know if I can school you in anything else.

        Tail Fin Only: made in Washington State.

        Stabilizer is made in Italy and I believe Colorado.

        Aft fuselage made in Charleston (originally by Vaught) .

        Center Section Italy, mated in Charleston to aft (also originally a Vauht operation)

        The above two were the origins of Boeing in Charleston.

        Wings, Gear box and center wing section in Japan with Wing Fiddly bits by Spirit in Tulsa Oklahoma.

        Forward Fuselage Japan.

        Section 43 Wichita KC .

        Gear: England (Messier- Dowty)

        Engine Nacelles: California

        Doors, fairings and other bits and pieces from various places like France, Sweden, Canada and Australia.

      • >Mrs Haley left the board a couple of weeks ago.

        Other penny drops… that she left because she knows the decision to close Charleston permenantly is imminent feels more plausible than the faux outrage over taking Gov. assistance.

        • Disagree totally.

          Boeing is not setup to make the 787-10 anywhere but Charleston.

          So that will be the 787 build and Everett looses 787.

  3. I used to have a lot more respect for Boeing as a company however the past few years has really turned me off to them. Actually I’ve been disgusted with management and board members.

  4. Sounds very ochestrated to me. We want the money but don’t need no bureaucrats. We know what is needed, as you saw.

  5. The best would be a straight nationalization of Boeing without compensation to share holders. They would regain their share once the company finances would return to normal, and under a renewed management.

    • Now that is interesting approach.

      Have them shaking in their boots screaming, no, no, we did not mean it.

    • The best thing probably is a nationalisation of Boeing. It’s clearly in need of deep reform in all aspects of the company operation.

      Thing is, for the best possible outcome from a nationalisation there’s no point waiting until the company has failed. It’s better to do it whilst it’s still a going concern. Putting Humpty Dumpty back together again is a whole lot harder than stopping him falling off the wall in the first place. So if the US Gov has identified nationalisation as possible a necessary step for strategic reasons, that probably means they’re on a hair trigger to kick that off.

      • @Matthew
        “The best thing probably is a nationalisation of Boeing. It’s clearly in need of deep reform in all aspects of the company operation.”

        This was the chosen path for the UK government in 1970 when it forced to prop up RR following its failure to develop the RB211 on time.
        Today’s situation at Boeing is somewhat different in that the problems extend throughout the entire company and its board and are not limited to a single product (RB211) as in RR’s case.

        • Boeing is more than the Commercial airplanes division.
          Defense -Space- Security division has military jets, helicopters, satellites , space launch rockets, as well as military derivatives of 767 and 737
          Boeing Global Services has its finger in may pies as well as aviation servicing and parts

          • “divisions, multitude of”

            Anything they are actually good at?
            … and not just siphoning off tax money to show a profit for value not created ..

          • 757 , 1049 delivered
            767 , 1180 delivered and still going
            777 , 1630 delivered and still going
            havent even counted the 737

            I think you have been in a bubble for a long time not to know that

          • today. not times gone by.

            767 sales and thus production is tax money floated cheap production
            777 is down to how many per month?
            ( and a succession of half a dozen subtypes needed to get there.)

            If i do live in a bubble it is a clear view (TM) one 🙂
            which Boeing subdivision can show excellence _today_ ( military ( tanker): no, Space, sorry we fogot to do that: no, NB craft: no while we are fishing for crud, WB: 787 semi-ok, we are hiding the crud and paper trail errors, 777X open, is that really just some new detail addons for a certified type)

          • Well then there is Germany who buys subs, and then lets them all fall out of service. Chock up 1 pork barrel for German company.

            then there is Leopard which there are 400 some odd, of which under a 100 are combat capable. Chock up 2 for Pork Barrel.

            then there is the A400, hmm, yet another pork barrel (granted that is 4 countries pork there)

            Not to mention Typhoons of which less than a squadron are combat ready. I believe that is a Brit and German company? Yet another pork barrel.

          • TransWorld’s funny gyrations:

            Leopards are cold War leftovers.

            Going by constant stream of invective from the US the A400M must do something right.

            In contrast to the US budget contractions hit the more or less superfluous military
            and not the essential health system.
            ( though I don’t get the mechanics of the failure: US spends about twice per p on health has more intensive care beds available but adequate services seem to be less available to those coming down with CoVid19? all those moneys just going into profit coffers?)

    • If it was all of Boeing there would be significant conflict of interest in DoD, DoE contract decisions etc. (one of the reasons given for avoiding the bailout so far hvaing been limits it would impose on Boeing’s ability to bid for govt contracts) and so lots more bureacracy and challenegs from LM et al.

      If it was just BCA, these issues would I guess largely disappear.

      But choosing your suggested route at the moment, when Boeing is neither certain to reach or actually close to bankruptcy, could set a precedent that would chill businesses and investment across the USA. I imagine it would also open up a hole can of worms (WTO?, ISDS?).

  6. I surprised nobody’s mentioned this – Boeing is bargaining hard! They know how the game is played. Of course they want the money. They just want it on their terms with no strings attached. To do with it as they see fit. Why pay employees when you can have a layoff? To pay it back with no interest over a 30 year term. Things like this.

    • I agree completely, as a former employee and now as a employee of their competitor it’s really obvious to me, they are still out to get anything that they can to milk the government on their own terms with no regard to the workers

  7. It’s actually very simple. There are 30,000 Boeing employees who are going to be idle for at least a month. The question is: who is going to pay for it? The State of Washington would like Boeing to shoulder all the costs. Naturally, Boeing would prefer the great State of Washington to cover *SOME* of the costs by paying up unemployment insurance. Why is it unfair or difficult to understand?

    Boeing pays for 2 weeks, then most people can take at least couple weeks of PTO, so the company and the employees are already covering 1 month of idle sitting. Seems totally fair to me that the State of Washington should step in after that [or even earlier] instead of begging the company to take loans with strings attached. Alternatively, the Feds and the State of Washington can give the money directly to Boeing so that the company can keep its employees on payroll. However I fail to see how anybody could blame Boeing in this situation.

  8. If commercial aircraft production is shut down for 2020, and only comes back at half rate in 2021, wouldn’t it be better for Boeing to use the mechanism of unemployment?
    It seems like madness to pay employees full pay to not work for a year, it’s unaffordable and economically irrational for both the government and Boeing. Fauci and Inslee are giving zero confidence that a quick resolution is possible. Boeing must be pragmatic.

    • Not taking care of your employees can have significant long term impact. Loyalty & engagement from people you need, that make the company takes a hit. Boeing must not be pragmatic, but honest, open and understanding. A 30% paycut accross the board might be more acceptable than cutting 30% of the employees, and their families.

      • So, who would guarantee that everyone will agree to this 30% cut?
        As someone explained above, if the government (the state) order you to close shop for a while, do you have to pay the full payment to the workers while you are not generating any income? How long can you do it? Isn’t the EU already working on something similar, so why criticize just one side?

  9. Some reinforcement for potential nationalization.
    Reading this and recalling all the other past failures, it’s clear Boeing is sick.
    Would anybody accept this kind of quality issue from a defibrillator or or a heart bypass machine, or even an automobile. The manufacturers of these products have learned how to deliver a product with complex software.
    Boeing was a sick organization before the pandemic and will remain so after the pandemic unless changes are made.
    The concept of “too big to fail” applies. Maybe the problem is it is too big.

  10. Maybe the US should run Boeing more like a utility and regulate it like natural gas or something. Controls on executive pay and stock buy backs seem like a great idea to me. The big unknown on cost is if only half the workforce is needed on restart, then what? Or if production ends 12 or 18 months instead of 6 months, who bears that cost, Boeing or the taxpayers?
    The government plan is to pay employees up to 80K 100% to be laid off. Meanwhile food service workers at 20K to 30K risk their health and have to actually toil 40 hours for their meager earnings.

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