Boeing’s unravelling quickens as stock craters

Boeing Co.’s rout deepened as investors reacted with alarm to news that the plane maker is seeking at least US$60 billion in U.S. government aid for itself and suppliers in a race to shore up cash during the novel coronavirus pandemic.

The federal support would encompass “public and private liquidity, including loan guarantees,” Boeing said Tuesday.

While the proposal’s details are still being fine-tuned, the bulk of the funding would flow through Boeing to its network of partsmakers, said a person familiar with the matter. Other companies could separately use the guarantees to line up their own financing.

The bailout push won an enthusiastic endorsement earlier from U.S. President Donald Trump, who told reporters that “we have to protect Boeing, we have to help Boeing.”

His administration is discussing a broad-based stimulus package of as much as US$1.2 trillion to blunt the economic impact of the widening crisis, and airlines and hotels are also rushing to line up government financing with the U.S. travel industry besieged. But Boeing ’s plea for help underscored the strain on an aviation industry grappling with its deepest crisis in decades. With the pandemic’s duration still unknown, talk is shifting to dire questions such as whether Boeing — until recently a prodigious cash generator and the country’s most valuable industrial company — is too big to fail.

“Boeing will not survive without a government bailout,” Bill Ackman, of Pershing Square Capital Management, said in an interview on CNBC. The hedge fund wasn’t a Boeing investor as of the latest public filings.

Boeing was down about 18 per cent to US$101.89 on the day in New York. The company’s shares have tumbled 72 per cent since their 2020 peak on Feb. 12, wiping out about US$141 billion in shareholder value. Boeing’s European rival, Airbus SE, has dropped 64 per cent over the same period.

Boeing is preparing for an extended disruption from the virus that also threatens to spill over into its factories, where some employees have been infected. The timing couldn’t be worse, hitting while the manufacturer is still reeling from last year’s grounding of its best-selling 737 Max jets after two deadly crashes.