Capital Economy, Business and Finance
Boeing has imposed a hiring freeze and spending cuts as it grapples with a strike by 33,000 workers that analysts estimate is costing it $100,000 a day in revenue. Seattle area workers walked out last week after rejecting a 25 per cent raise, and Boeing has ceased purchases from suppliers to its 737 Max, 767 and 777 production lines, all of which are affected by the strike. It was already dealing with production problems on the 777 and 787 and an accidental stranding of two astronauts in space. Moody’s and Fitch have signalled that a downgrade of Boeing’s credit status to junk is expected. In response a share offer to inject new cash – perhaps as much as $10 billion – into the company looks likely. The planemaker still has a backlog of 5,400 orders worth $437 billion. With an order book so large, in a market that is an essential duopoly, some investors will bet that Boeing still has more runway ahead.
