Due to a 'Perfect Storm,' Is Boeing Headed Toward Declaring Chapter 11 Bankruptcy?

The Boeing Company is the most venerable manufacturing company in Washington state and the Puget Sound. It has been a bedrock institution for many years for this community, weathering other financial crises that erupted in the past. But ...

Today is an unusual situation. Here are many of the events that have impacted the finances of the company. Elements of the "perfect storm" include:

• Two airline crashes of the 737 Max in 2019, the flagship single aisle — cash cow of the company
• A worldwide grounding of all 737 Max aircraft that were delivered to airlines
• Airlines cancelling flights and seeking reimbursement from Boeing for lost revenue
• The Boeing reputation tarnished by emails that revealed safety concerns within the company and quality issues
• The company continued to build aircraft and park them, awaiting FAA approval of the software and technology fixes proposed by Boeing
• Cessation of manufacturing of the 737 Max in December and continuing until today
• Boeing has maintained the workforce, not laying off company staff
• Additionally, a launch failure (really an inability to dock) for the Boeing delivery vehicle for the Space Station
• Boeing had to borrow money to meet their financial obligations
• Boeing vendors who make parts for the 737 Max are now financially stressed
• Now the coronavirus/COVID-19 is having its impacts
• Airlines taking a big hit to their bottom line
• New orders not expected for planes and cancellation of existing orders can be expected
• The stock market is down to bear territory, and on March 11, Boeing stock is down 10%
• Their cash reserves cannot be in good shape, or they would not have borrowed money in December

Then what prompted me to write this is this article, Boeing will cash out $13.8 billion loan and freeze hiring amid coronavirus market turmoil.

There will be continued pressures on the company in the days, weeks and likely months ahead. The path forward is uncertain. Perhaps a federal "bailout" of the aviation industry will have a Boeing component. If not ... the future could be troublesome for Boeing.