Boeing gets a bailout, but economy still faces trouble
Boeing secured commitments of over $12 billion in financing from more than a dozen banks, CNBC reported Monday, citing unnamed sources.
Why it matters: The bailout will help Boeing maintain a healthier cash position as it deals with the fallout from a mandatory production stoppage of its 737 MAX jet after two crashes that killed hundreds of people.
- However, Boeing's production halt will still be felt by a number of companies that rely on the aviation behemoth.
- The stoppage also could threaten the overall U.S. economy, experts say.
The big picture: Pantheon Macroeconomics chief economist Ian Shepherdson predicts today's durable goods report will show a 2% year-over-year decline as a result of Boeing's troubles.
- BofA Global Research revised their second quarter GDP forecast down by 0.4% as a result of Boeing's relaunch for the 737 MAX being pushed back.
Of note: As I wrote two weeks ago, Moody's has warned that Boeing's suspension could hit dozens of companies, identifying 24 with exposure to Boeing and its supply chain and placing four on review for downgrades.
- One, Spirit Aerosystems, laid off 2,800 employees and had its credit rating downgraded.