Boeing (BA) - Get Report is prepping for a “a safe and orderly restart of limited operations” at a handful of its Washington state sites as early as Monday as the company works out arrangements with investment banks to secure a financial lifeline following the unprecedented downturn of much of the world’s airline industry.
The Seattle Times reported that Boeing will recall some 2,500 of its employees this week to the company’s defense-program units - including the Navy’s P-8 anti-submarine plane built in Renton, and the Air Force KC-46 tanker built in Everett - as well as maintenance operations at Moses Lake in support of the grounded 737 MAX planes stored there.
The worker recall comes less than a week after the plane maker and aerospace company announced that a shutdown of its local plants to contain the spread of Covid-19 would be extended indefinitely. Affected employees had to either take vacation or sick leave, or apply for unemployment. Some 30,000 employees have been idled by the shutdown.
Meantime, Boeing has tapped investment banks for help in keeping itself solvent. The Wall Street Journal reported that Lazard and Evercore will help Boeing analyze government aid and potential funding from the private market to keep itself operational until demand for aircraft and other offerings rebounds.
The U.S. Treasury Department has earmarked up to $17 billion of federal aid for Boeing and its suppliers as part of a larger rescue of the airline industry in the roughly $2 trillion stimulus package approved by Congress last month.
Analysts estimate Boeing may need to raise as much as an additional $20 billion this year to cover debt- service costs and other expenses.
Already reeling from a prolonged grounding of its 737 MAX following two fatal crashes, Boeing and rival Airbus now face a demand tailspin as both domestic and international carriers pare back their schedules and park hundreds of existing jets.
Before the pandemic, Chicago-based Boeing had hoped to restart limited production of the aircraft in May. The coronavirus forced it to indefinitely close its main assembly plants near Seattle and one in South Carolina.
Shares of Boeing were down 2% at $148.80 in premarket trading on Monday. Boeing’s market value now stands at roughly $86 billion, down from close to $190 billion at the beginning of the year. Its shares are down more than 50% year to date.