Boeing CEO Would Oppose Aid Tied to Government Stake -- WSJ
March 25 2020 - 3:02AM
Dow Jones News
By Andrew Tangel
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (March 25, 2020).
Boeing Co. Chief Executive David Calhoun suggested he would
decline taxpayer aid if lawmakers require the government to take an
equity stake in the beleaguered aerospace giant.
"I don't have a need for an equity stake," Mr. Calhoun said in a
Tuesday interview on Fox Business Network. "If they forced it, we'd
just look at all the other options, and we have got plenty."
Mr. Calhoun's comments came as Congress was negotiating details
of an aid package of more than $1.6 trillion aimed at blunting the
economic fallout from the worsening novel coronavirus outbreak. The
package could benefit businesses including Boeing and U.S. airlines
and provide support for workers.
The Treasury Department took equity stakes in banks as part of
the Troubled Asset Relief Program during the banking crisis in
2008.
Instead of the government taking an equity stake in Boeing, Mr.
Calhoun expressed support for taking out taxpayer-funded loans and
repaying them with interest.
"I want them to support the credit markets, provide liquidity,
allow us to borrow against our future, which we all believe in very
strongly," Mr. Calhoun said.
To ease its cash crash, Boeing has suspended its dividend and
drawn down a credit line. It is seeking at least $60 billion in
public and private aid for itself, its suppliers and the broader
aerospace industry. On Monday, Boeing said it would halt production
in the Seattle area for two weeks to curb the spread of the
virus.
Mr. Calhoun acknowledged air travel is already virtually
grinding to a halt, but expressed confidence the aviation industry
would recover more quickly than more dire forecasts predict.
Major U.S. airlines are drafting plans for a potential voluntary
shutdown of virtually all passenger flights across the U.S.,
according to industry and federal officials, The Wall Street
Journal reported.
Government agencies also are considering ordering such a move
and the nation's air-traffic control system continues to be ravaged
by the coronavirus contagion. No final decisions have been made by
the carriers or the White House, these officials said
On Tuesday, the International Air Transport Association offered
its latest forecast for global airline traffic, saying it would
fall 38% in 2020 and cost carriers $252 billion in revenue. That is
double its prior estimate of the impact of the coronavirus as it
intensifies efforts to persuade governments to provide financial
support for the industry.
The near-grounding of many airlines' service as demand collapsed
has forced them to park thousands of planes and left many carriers
running out of cash, triggering job cuts as governments continue to
expand travel restrictions.
"We need a full-speed rescue package now," Alexandre de Juniac,
IATA's chief executive said on a call with reporters. Industrywide,
airlines are looking for around $200 billion in support to cover
their fixed costs.
--Doug Cameron contributed to this article.
Write to Andrew Tangel at Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
March 25, 2020 02:47 ET (06:47 GMT)
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