WASHINGTON - Boeing said on Wednesday that it would cut its 160,000-person workforce by about 10 per cent, further reduce 787 Dreamliner production, and try to boost liquidity as it prepares for a years-long industry recovery from the coronavirus pandemic that drove its second consecutive quarterly loss.
Chicago-based Boeing burned through US$4.7 billion in cash in the first quarter, but said it was confident of getting sufficient liquidity to fund its operations, sending its shares up 7.7 per cent to US$141.37. With few people flying, key 737 MAX customers like Southwest Airlines are deferring their deliveries.
Analysts said the quarterly cash burn was not as bad as feared, and that the company might be able to avoid raising capital from the US Treasury, although Seth Seifman of J.P. Morgan said the path forward for Boeing still remains"quite challenging". The planemaker ended the quarter with US$15.5 billion in cash.
It is also facing lawsuits related to the 737 MAX crashes and federal prosecutors aided by the FBI, the Department of Transportation's inspector general are investigating the aircraft's certification.