Boeing will resume commercial airplane production next week in Washington State after suspending operations in response to the coronavirus pandemic and the company’s chief executive told employees the aerospace industry will need financial help from government.
“Our industry will need government support, which will be critical to ensuring access to credit markets and likely take the form of loans versus outright grants,” Boeing Chief Executive Dave Calhoun told employees in a letter seen by Reuters. “Our team continues to focus on the best ways to keep liquidity flowing through our business and to our supply chain until customers are buying airplanes again”.
About 27 000 Boeing workers in the Puget Sound area will return to production on the 747, 767, 777 and 787 jet programmes.
Employees on the 747, 767 and 777 will return starting April 20, while employees on the 787 programme will return April 23 or April 24.
In January, Boeing halted production of the 737 MAX after two fatal crashes in five months. Employees on the 737 programme in Puget Sound return to work starting April 20 working to restarting MAX production, the company said.
Boeing, with around 200 employees globally testing positive for the coronavirus, is instituting safeguards including staggering shift start times, adding floor markings and signage to create physical distance and requiring face coverings for employees at company sites.
Boeing asks employees to do self-health checks before coming to work and stay home if ill. It will conduct employee wellness checks before every shift and voluntary temperature screening at manufacturing locations.
A Boeing spokesman declined to say whether the company would seek government assistance.
Boeing said last month it wanted government to “ensure a minimum of $60 billion in access to public and private liquidity, including loan guarantees, for the aerospace manufacturing industry.”
Calhoun said in March he did not want the US Treasury to take an equity stake as a condition of government loans.
President Donald Trump repeatedly vowed to help Boeing.
“Boeing has not asked for ai but I think they probably will,” Trump said last week. “We can’t let anything happen to Boeing.”
Last week, Boeing hired investment banks Lazard and Evercore Inc to assess potential government assistance or private sector loans, Reuters reported.
Calhoun noted Treasury and 10 airlines agreed on an aid package of $25 billion, while 2 500 U.S. aircraft are idle and passenger volume is down over 95%.
“Knowing the US airline industry has critical financial support through this devastating wave of the virus allows us to plan production for medium- and long-term impact on air travel,” Calhoun said.
Congress set aside $17 billion in direct loans for national security related companies. This could be tapped by Boeing and it could also take part in a Treasury-backed Federal Reserve lending programme.
Last week, Boeing suspended production of the 787 at its South Carolina facility.
Boeing customers deferred new aircraft and making pre-delivery down payments, compounding the crisis over grounding of the 737 MAX.
Boeing this week reported 75 more cancellations for the 737 MAX in March. The 50 aircraft delivered in the first three months of the year was the lowest since 1984 for the first quarter.