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Boeing Mirrors the Economy. It Doesn’t Look Good. Boeing Mirrors the Economy. It Doesn’t Look Good.
(8 days later)
As the crisis caused by the coronavirus continues to spiral out of control, the vast ramifications of the global economy’s screeching to a halt are already on display at one of most important companies in the United States: Boeing.As the crisis caused by the coronavirus continues to spiral out of control, the vast ramifications of the global economy’s screeching to a halt are already on display at one of most important companies in the United States: Boeing.
Boeing is the nation’s largest manufacturer. It employs more than 100,000 people domestically and supports millions more through a supply chain that includes thousands of businesses big and small around the country. But Boeing’s stock price has dropped more than 40 percent in the last five days, and with the broader airline industry reeling, President Trump signaled Tuesday that he would strongly consider a bailout for Boeing.Boeing is the nation’s largest manufacturer. It employs more than 100,000 people domestically and supports millions more through a supply chain that includes thousands of businesses big and small around the country. But Boeing’s stock price has dropped more than 40 percent in the last five days, and with the broader airline industry reeling, President Trump signaled Tuesday that he would strongly consider a bailout for Boeing.
“I think we have to protect Boeing,” Mr. Trump said. “We have to absolutely help Boeing. Obviously, when the airlines aren’t doing well, then Boeing is not going to be doing well. So we’ll be helping Boeing.”“I think we have to protect Boeing,” Mr. Trump said. “We have to absolutely help Boeing. Obviously, when the airlines aren’t doing well, then Boeing is not going to be doing well. So we’ll be helping Boeing.”
On Tuesday evening, the company said it was in favor of an enormous government support package for airplane manufacturers like itself.On Tuesday evening, the company said it was in favor of an enormous government support package for airplane manufacturers like itself.
“Boeing supports a minimum of $60 billion in access to public and private liquidity, including loan guarantees, for the aerospace manufacturing industry,” Boeing said in a statement. “This will be one of the most important ways for airlines, airports, suppliers and manufacturers to bridge to recovery.”“Boeing supports a minimum of $60 billion in access to public and private liquidity, including loan guarantees, for the aerospace manufacturing industry,” Boeing said in a statement. “This will be one of the most important ways for airlines, airports, suppliers and manufacturers to bridge to recovery.”
Boeing was already coming off the worst year in its history because of the grounding of its 737 Max plane after two crashes left 346 people dead. Now the coronavirus is posing daunting new challenges. Airlines, faced with a precipitous drop in travelers, will not be ordering new planes for a long time and are refusing to take delivery of the ones they have already bought. Boeing cannot deliver jets to Europe or China. Supply-chain disruptions and social distancing measures may force it to shut down factories.Boeing was already coming off the worst year in its history because of the grounding of its 737 Max plane after two crashes left 346 people dead. Now the coronavirus is posing daunting new challenges. Airlines, faced with a precipitous drop in travelers, will not be ordering new planes for a long time and are refusing to take delivery of the ones they have already bought. Boeing cannot deliver jets to Europe or China. Supply-chain disruptions and social distancing measures may force it to shut down factories.
Boeing executives are trying to determine what to do if shelter-in-place orders, school closings or the virus itself makes it impossible to manufacture planes, said a person briefed on the deliberations, who spoke on the condition of anonymity to discuss internal matters.Boeing executives are trying to determine what to do if shelter-in-place orders, school closings or the virus itself makes it impossible to manufacture planes, said a person briefed on the deliberations, who spoke on the condition of anonymity to discuss internal matters.
In recent days, senior Boeing executives have made it clear to the White House and Congress that if the aerospace giant does not receive government assistance, it could decline rapidly, causing significant damage to the American economy.In recent days, senior Boeing executives have made it clear to the White House and Congress that if the aerospace giant does not receive government assistance, it could decline rapidly, causing significant damage to the American economy.
The tumbling of its stock price has pulled down the markets in recent weeks. Even before the virus crisis took hold, Mr. Trump blamed the 737 Max for contributing to a drop in the gross domestic product.The tumbling of its stock price has pulled down the markets in recent weeks. Even before the virus crisis took hold, Mr. Trump blamed the 737 Max for contributing to a drop in the gross domestic product.
The fallout from the virus poses Boeing’s greatest challenge since the Sept. 11, 2001, terrorist attacks, when it cut production in half and laid off tens of thousands of people. Company insiders say the pandemic is far worse, since it has touched every continent other than Antarctica and plunged nearly every airline worldwide into crisis.The fallout from the virus poses Boeing’s greatest challenge since the Sept. 11, 2001, terrorist attacks, when it cut production in half and laid off tens of thousands of people. Company insiders say the pandemic is far worse, since it has touched every continent other than Antarctica and plunged nearly every airline worldwide into crisis.
“It’s not just Boeing,” said Susan Houseman, director of research at the Upjohn Institute for Employment Research. “Its supply chain may be irreparably damaged. There will be bankruptcies, companies will lose their workers, and they just can’t restart in six months.”“It’s not just Boeing,” said Susan Houseman, director of research at the Upjohn Institute for Employment Research. “Its supply chain may be irreparably damaged. There will be bankruptcies, companies will lose their workers, and they just can’t restart in six months.”
Boeing executives are furiously drafting contingency plans and trying to find a way to keep factories open and avoid mass layoffs or furloughs, three people familiar with the deliberations said. Executives from the medical, financial and human resources teams are monitoring developments constantly, and have identified several potential situations that could cause production to grind to a halt, one of the people said.Boeing executives are furiously drafting contingency plans and trying to find a way to keep factories open and avoid mass layoffs or furloughs, three people familiar with the deliberations said. Executives from the medical, financial and human resources teams are monitoring developments constantly, and have identified several potential situations that could cause production to grind to a halt, one of the people said.
Boeing executives believe the most likely possibility is that the government effectively mandates a work stoppage, either by shutting down all nonessential businesses or instituting strict travel restrictions, such as border closures or shelter-in-place orders.Boeing executives believe the most likely possibility is that the government effectively mandates a work stoppage, either by shutting down all nonessential businesses or instituting strict travel restrictions, such as border closures or shelter-in-place orders.
Factories could also shut down if too many employees at one facility become sick, raising the risk of community spread on the factory floor. And supply-chain disruptions could become so severe that Boeing does not have the parts it needs to make planes.Factories could also shut down if too many employees at one facility become sick, raising the risk of community spread on the factory floor. And supply-chain disruptions could become so severe that Boeing does not have the parts it needs to make planes.
Boeing is bracing for a rise in absent workers, either because school closings force parents to stay home or because people are too scared to leave the house. Already, some workers have begun to stay home, one of the people briefed on the plans said.Boeing is bracing for a rise in absent workers, either because school closings force parents to stay home or because people are too scared to leave the house. Already, some workers have begun to stay home, one of the people briefed on the plans said.
Should plants have to shut down, Boeing could move them into a state of “suspended operations.” Under such conditions, some Boeing employees might still be paid. And if workers at the company’s factories in Washington State are sick, they may be eligible for the state’s paid family and medical leave.Should plants have to shut down, Boeing could move them into a state of “suspended operations.” Under such conditions, some Boeing employees might still be paid. And if workers at the company’s factories in Washington State are sick, they may be eligible for the state’s paid family and medical leave.
Yet there is also the possibility that the sudden drop in demand for Boeing products leads to layoffs. In that event, executives would consult an internal ranking system known as the “retention totem,” a reference to the totem poles of the Native Americans of the Pacific Northwest, where Boeing was founded and still has its largest presence.Yet there is also the possibility that the sudden drop in demand for Boeing products leads to layoffs. In that event, executives would consult an internal ranking system known as the “retention totem,” a reference to the totem poles of the Native Americans of the Pacific Northwest, where Boeing was founded and still has its largest presence.
In the system, employees are put in one of three categories, from R1 to R3, based on how essential they are to the business, three people familiar with the system said. The lower the number, the less likely one is to get fired.In the system, employees are put in one of three categories, from R1 to R3, based on how essential they are to the business, three people familiar with the system said. The lower the number, the less likely one is to get fired.
Updated July 7, 2020
The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles.
A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.
The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.
The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
Mass layoffs would put Boeing in a very difficult position. Restarting production won’t be easy if the company has lost a significant chunk of its skilled mechanics and engineers.Mass layoffs would put Boeing in a very difficult position. Restarting production won’t be easy if the company has lost a significant chunk of its skilled mechanics and engineers.
But the company will need to cut costs and is running out of other options.But the company will need to cut costs and is running out of other options.
Borders are closing, and Mr. Trump has raised the prospect of cordoning off Washington, a move that would paralyze Boeing’s production. And with airlines around the world facing imminent bankruptcy, Boeing may soon face an abrupt drop in revenue.Borders are closing, and Mr. Trump has raised the prospect of cordoning off Washington, a move that would paralyze Boeing’s production. And with airlines around the world facing imminent bankruptcy, Boeing may soon face an abrupt drop in revenue.
Fifteen Boeing employees around the country have tested positive for Covid-19, the disease caused by the new virus. Suppliers are already having problems delivering necessary parts to Boeing; one, a major manufacturer of parts for the company’s 787 and 767 planes, is based in northern Italy, an epicenter of the outbreak. General Electric, which supplies 90 percent of all Boeing engines, also gets parts in Italy.Fifteen Boeing employees around the country have tested positive for Covid-19, the disease caused by the new virus. Suppliers are already having problems delivering necessary parts to Boeing; one, a major manufacturer of parts for the company’s 787 and 767 planes, is based in northern Italy, an epicenter of the outbreak. General Electric, which supplies 90 percent of all Boeing engines, also gets parts in Italy.
Mr. Trump is seeking a $850 billion stimulus package, which is expected to include relief for the aviation industry. For Boeing, the most likely result is that the government guarantees billions of dollars in loans that big banks would make to the company. If Boeing’s revenues run dry for months, such loans could allow it to keep paying some employees and suppliers.Mr. Trump is seeking a $850 billion stimulus package, which is expected to include relief for the aviation industry. For Boeing, the most likely result is that the government guarantees billions of dollars in loans that big banks would make to the company. If Boeing’s revenues run dry for months, such loans could allow it to keep paying some employees and suppliers.
Even before the prospect of government relief was on the table, Boeing was taking steps to fortify its finances. Last week, it drew down a credit line of $13.8 billion.Even before the prospect of government relief was on the table, Boeing was taking steps to fortify its finances. Last week, it drew down a credit line of $13.8 billion.
The impact of the pandemic on the aviation industry has already been profound. Demand for commercial airplanes has fallen sharply, and no one is sure when it will return.The impact of the pandemic on the aviation industry has already been profound. Demand for commercial airplanes has fallen sharply, and no one is sure when it will return.
Airlines around the world have also sharply reduced service, including American, United, Delta and major international carriers like Cathay Pacific and Lufthansa. Analysts believe that within months, many airlines may go bankrupt.Airlines around the world have also sharply reduced service, including American, United, Delta and major international carriers like Cathay Pacific and Lufthansa. Analysts believe that within months, many airlines may go bankrupt.
More immediately, Boeing is assessing its ability to continue day-to-day production. The company is working with Gov. Jay Inslee of Washington to figure out whether the prohibition on gatherings of more than 50 people applies to, say, a cafeteria that can seat 200 in the company’s plant in Everett.More immediately, Boeing is assessing its ability to continue day-to-day production. The company is working with Gov. Jay Inslee of Washington to figure out whether the prohibition on gatherings of more than 50 people applies to, say, a cafeteria that can seat 200 in the company’s plant in Everett.
On Tuesday, Airbus, Boeing’s chief rival, shut down factories in France and Spain in an effort to stop the spread of the virus.On Tuesday, Airbus, Boeing’s chief rival, shut down factories in France and Spain in an effort to stop the spread of the virus.
Most analysts, bankers and executives believe Boeing will come through this crisis, partly because it’s viewed as too big to fail. Boeing is not just one of two companies in the world making commercial airplanes. It is also one of the largest defense contractors in the country and a producer of critical aircraft and equipment for the National Aeronautics and Space Administration.Most analysts, bankers and executives believe Boeing will come through this crisis, partly because it’s viewed as too big to fail. Boeing is not just one of two companies in the world making commercial airplanes. It is also one of the largest defense contractors in the country and a producer of critical aircraft and equipment for the National Aeronautics and Space Administration.
“For Boeing to collapse and go out of business, it would be devastating to the economy,” said Scott Hamilton, an aviation consultant. “It will survive, in one form or another.”“For Boeing to collapse and go out of business, it would be devastating to the economy,” said Scott Hamilton, an aviation consultant. “It will survive, in one form or another.”