Ortberg, Robert K

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    Trump’s Tariffs Could Deal a Blow to Boeing and the Aerospace Industry

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    Aerospace companies are big exporters but also very reliant on a global supply chain, making them vulnerable.Boeing is the kind of manufacturer — one that exports billions of dollars of goods — that President Trump says he wants to protect and nurture.But his tariffs could have the opposite effect on the company’s suppliers.Mr. Trump has imposed a few tariffs so far, but he says more are coming in just a few weeks. That threat has unnerved the aerospace industry, of which Boeing is one of the largest companies. Duties on aluminum and steel, two of the most important raw materials used in aircraft, are expected to raise manufacturing costs. But the industry is far more concerned by tariffs that take effect on goods from Canada and Mexico next month, which could disrupt the highly integrated North American supply chain.“These tariffs are particularly fraught for an industry like aerospace that has been duty-free for decades,” said Bruce Hirsch, a trade policy expert at Capitol Counsel, a lobbying firm in Washington, which has aerospace clients. “Parts are coming from everywhere.”Aerospace experts say the industry is an example of U.S. manufacturing prowess. It offers well-paying jobs and has produced one of the largest trade surpluses of any industry for years. Aerospace is expected to export about $125 billion this year, according to IBISWorld, second only to oil and gas.But the industry is operating under a cloud of uncertainty. Many companies have been able to avoid costly cross-border tariffs under a short-term reprieve for products covered by a North American trade agreement that Mr. Trump negotiated in his first term. But that deal expires in April.In a letter to administration officials last week, groups representing airlines, plane repair stations, suppliers and manufacturers asked for an exception to the tariffs, arguing that it was needed to keep the industry competitive on the global market.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Boeing Will Sell $19 Billion in Stock Amid Costly Strike

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      The aerospace company, locked in a standoff with striking workers, is seeking to shore up its balance sheet and avoid a credit rating downgrade.Boeing on Monday began to raise roughly $19 billion by selling stock, an attempt to shore up its finances as a costly and disruptive worker strike weighs on the plane maker’s balance sheet.The sale comes shortly after the aerospace giant reported a $6.1 billion loss in the last quarter and said it was cutting about 17,000 jobs. A weekslong strike by Boeing machinists is costing the company tens of millions of dollars each day, according to analyst estimates, adding to the financial strain created by long-running production and quality issues.The fund-raising aims to stave off a potential credit rating downgrade, which could make it more expensive for the company to borrow money. Boeing has about $58 billion in debt. S&P Global Ratings said this month that it was considering lowering Boeing’s credit rating to “junk” status, depending on how long the strike continues.Boeing’s shares fell about 1 percent Monday morning. The company’s stock has fallen more than 40 percent this year.Last week, Boeing’s largest union, which represents about 33,000 workers, rejected a tentative labor contract, extending a strike that began last month and has halted airplane production at crucial plants in the Seattle area. The proposed agreement did not address a frozen pension plan that workers were seeking to restore.Boeing indicated in regulatory filings this month that it planned to raise as much as $25 billion by selling stock or debt over the next three years, and the company entered into a $10 billion credit agreement with a group of banks. It described the plans as “two prudent steps to support the company’s access to liquidity.”The plane maker hasn’t reported an annual profit since 2018. Before the machinists’ strike started to weigh on the company, two fatal crashes of Boeing’s 737 Max in 2018 and 2019 cost it billions of dollars and severely damaged its reputation. Concerns about the safety of Boeing’s commercial planes resurfaced in January, when a door panel on a 737 Max 9 jet blew open during an Alaska Airlines flight.The stock sale on Monday covers only the company’s near-term needs, “without an extended strike or further production disruptions,” analysts at Wells Fargo said in a research note. More

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      Boeing Union Workers Reject Contract

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      The vote, hours after Boeing reported a $6.1 billion loss, will extend a monthlong strike at factories where the company makes its best-selling commercial plane.Boeing’s largest union rejected a tentative labor contract on Wednesday, a blow to the aerospace manufacturer and the Biden administration, which had intervened in the hopes of ending an economically damaging strike that began more than five weeks ago.The contract, the second that workers have voted down, was defeated by a wide margin, with 64 percent of those voting opposing the deal, according to the union, the International Association of Machinists and Aerospace Workers. The union represents about 33,000 workers, but it did not disclose how many voted on Wednesday.“This wasn’t enough for our members,” said Jon Holden, president of District 751 of the union, which represents the vast majority of the workers. “They’ve spoken loudly and we’re going to go back to the table.”The vote is a setback for Boeing’s new chief executive, Kelly Ortberg, who is trying to restore Boeing’s reputation and business, which he described in detail earlier on Wednesday. In remarks to workers and investors, Mr. Ortberg said Boeing needed to undergo “fundamental culture change” to stabilize the business and to improve execution.“Our leaders, from me on down, need to be closely integrated with our business and the people who are doing the design and production of our products,” he said. “We need to be on the factory floors, in the back shops and in our engineering labs. We need to know what’s going on, not only with our products, but with our people.”Mr. Ortberg delivered that message alongside the company’s quarterly financial results, which included a loss of more than $6.1 billion. This month, Boeing also announced plans to cut its work force by about 10 percent, which amounts to 17,000 jobs. Boeing also recently disclosed plans to raise as much as $25 billion by selling debt or stock over the next three years as it tries to avoid a damaging downgrade to its credit rating.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More