By Scott Hamilton
Boeing also needs to borrow more money in the next six months to get through the crisis.
These were among the announcements at the Boeing annual shareholders meeting today at which all 12 management-support directors were elected or reelected to the Board of Directors.
David Calhoun, the CEO, also said that after two years, it was pointless to continue negotiations with Embraer over conditions required in the Master Transaction Agreement (MTA) for the Boeing Brasil joint venture.
The proposed commercial and military JVs were terminated Saturday by Boeing. Embraer today said the arbitration process provided in the MTA has begun.
Calhoun didn’t specify what terms of the MTA it believes Embraer failed to meet. Embraer Saturday said it met all terms. It believes Boeing stalled and withdrew from the deal because of its own financial condition, the extended grounding of the 737 MAX and its own reputational problems.
There is speculation that any money from the federal government may preclude foreign investments. Political and labor criticism of taking taxpayer dollars then sending $4.2bn offshore, and jobs along with it, would be untenable.
Calhoun did not announce any changes in production rates. This will come Wednesday, when Boeing announces its first quarter earnings.
But he said it was necessary to continue to keep production going at whatever rates to keep the supply chain going.
In response to a shareholder question, Calhoun said there won’t be any dividends paid in the medium-term years to come—at least 3-5 years. Boeing must rebuild its balance sheet before resuming dividends, he said. The question of stock buybacks didn’t come up.
There are 2,800 idled airliners in the US alone, Calhoun said.