Boeing Secures $35 Billion Amid Labor Strike and Production Delays

$35 Billion in New Funding to Address Challenges
Boeing has secured up to $35 billion in funding to stabilize its financial position as it deals with labor disruptions and operational setbacks. The company plans to raise $25 billion through stock and debt offerings, along with a $10 billion credit agreement with major banks. This funding is aimed at providing short-term liquidity and supporting Boeing’s efforts to navigate its current operational difficulties.

Labor Strike and Production Halt
A strike by over 32,000 workers at Boeing’s Pacific Northwest facilities, which began on September 13, has disrupted production of key aircraft models, including the popular 737 Max, as well as the 767 and 777. The strike, triggered by disputes over wages and retirement benefits, has already cost the company around $3.2 billion. Despite ongoing mediation by the US Labor Department, both Boeing and the unions remain deadlocked in negotiations, and further delays to production are expected.

Operational Hurdles, Workforce Reductions, and Program Delays
Boeing is also facing multiple operational challenges, including regulatory limits on the 737 Max production rate and ongoing supply chain issues that are delaying the 787 Dreamliner program. In addition, Boeing announced a 10% workforce reduction on October 11 and further delays to the 777X program. These operational issues are compounding the company’s financial strain and have led to delays in aircraft deliveries.

Strategic Acquisition of Spirit AeroSystems
In an effort to strengthen its supply chain, Boeing has agreed to reacquire Spirit AeroSystems, its fuselage supplier, for $4.7 billion. The deal will add Spirit’s debt to Boeing’s balance sheet but is seen as a strategic move to ensure more stable production and reduce dependence on external suppliers amid ongoing challenges.