Wall Street sources have told Captain Jetson that the U.S. Government will become a stakeholder of Boeing. Furthermore, the clearest signal that this is underway has been the resignation of Former Ambassador to the UN, Nikki Haley.
Rumors were swirling, but I was able to confirm
Before receiving this tweet, I heard rumblings in DC but my sources didn’t want to comment as there was pushback. After this tweet, I was investigating this matter and within a few hours, I received the confirmation from Wall Street.
Boeing committed too many mistakes
As the Business World is grappling with COVID-19 it is imminent that the U.S. Government would become a stakeholder of the largest aircraft manufacturer. This is an attempt to maintain the solvency of the company.
Boeing’s mistakes included the 737-MAX as well as the debt repayments of airlines and suppliers worldwide. In addition, the reduction in aircraft deliveries and thinking of cutting the dividend and layoffs have contributed to positioning the company where it is currently sitting.
COVID-19 drove the collapse of the company
There is a cash drain at Boeing. COVID-19 would place the manufacturer at $45 billion dollars in debt even without government support. Last Year, they had $10 billion in cash and now is long gone. Last week, they asked for a $13.8 billion loan, which means that there is no cash reserve as of today.
Former Ambassador Haley Resigns
In a Breaking News story, Nikki Haley the former ambassador to the United Nations has resigned to the Board of Boeing. She has less than a year as she came on board in April, Last Year. She opposed any kind of economic package to the company which deals a great blow to the Board.
Would the U.S. Government become a Majority Stakeholder?
That’s the Million Dollar Question. Sherwin Pishevar believes it will become a state-owned company. Furthermore, Boeing has erased 70% of the market share and is pushing for a $60 Billion Dollar economic package.
U.S. Congress will comply but whether or not it is a state-owned company is pushing it, in my opinion. Although, I think it is possible since it happened with AIG in 2008.
In addition, Boeing is in the red because of a compounding problem and COVID-19 was the nail in the coffin. I can understand the argument of National Security as Boeing is too vital for the security of the United States.
Bottom Line: Whether a Loan or a Bailout it needs to come with conditions!
We are in strange times, even as I am a capitalist by heart many of these companies didn’t save for a rainy day fund. The Banking Sector learned its lesson in 2008, and now they stronger than ever.
It is time to place the same restrictions on Airlines, Aircraft Manufacturers, Suppliers and the tourism industry as a whole.
Maybe next time they would be stronger than they are now?
Update: Boeing is preparing restrictions to receive loan/bailout
The Aerospace & Defense Company is preparing to place restrictions to maintain solvency as the government finalizes details on the government aid.
I applaud the move because it was the restrictions that the President’s placed to receive government aid. Many companies are following the Presidents and the Minority Leader in the Senate Chuck Schumer in regards to stock buybacks, and compensation of executives mixed with government aid.
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Featured Image: Unsplash.